The Wind Power Purchase Agreement

The power purchase agreement or "PPA" is a key agreement in the development of a wind power project. While there are wind farms that are "merchant" projects subject to a PPA are far more numerous. For such projects, the PPA represents the sole, or most significant, source of revenue.   What I have tried to do in this paper is identify some of the typical issues that arise in the course of negotiating a PPA, both in the United States and Canada, from the perspective of a project lender.  This perspective is a most important one because lenders will typically have a lower risk tolerance compared to developers and equity investors. The latter have a different risk/reward profile and are generally willing to take certain risks that lenders are not. Accordingly, the developer, who often negotiates and settles a PPA before the project lenders are selected, must attempt to anticipate and be sensitive to lender requirements in the course of negotiating a PPA. Failure to do so can result in