Ask Unicase: Central Asia Energy Q&A

Q1: What are the main challenges that limit investment in, and development of, renewable energy projects?

Kazakhstan's Model Power Purchase Agreement (PPA) for renewable energy projects presents several bankability challenges that may deter investors and lenders. One of the key issues is the absence of a change of law clause, leaving developers without protection or reimbursement if legal or regulatory changes negatively impact project economics. Additionally, the force majeure provisions are vague, creating uncertainty in unforeseen circumstances. While the law mandates the single buyer to purchase electricity from RES producers, transmission companies are not obligated to accept or deliver the full output, undermining the take-or-pay principle. Moreover, the PPA lacks clear risk allocation for curtailment and grid downtime, exposing developers to revenue losses without compensation.