Power Purchase Contract Template for United Arab Emirates

The Power Purchase Contract serves as the cornerstone agreement for power generation projects in the United Arab Emirates, establishing the commercial and operational framework for electricity sales. This document is essential for independent power producers, utilities, and large industrial consumers engaging in power purchase transactions under UAE law. The agreement typically covers a long-term period (15-25 years) and includes detailed provisions for power supply obligations, pricing mechanisms, performance standards, and risk allocation. It must comply with both federal UAE energy regulations and specific emirate-level requirements, particularly those of the relevant regulatory authority (such as DEWA in Dubai or DoE in Abu Dhabi). The document is crucial for project financing and typically incorporates provisions for both conventional and renewable energy projects, reflecting the UAE's growing focus on sustainable energy development.

1. Parties: Identification of the power producer/seller and the power purchaser/offtaker, including their legal status and authority to contract

2. Background: Context of the agreement, including project overview, facility location, and relevant regulatory framework

3. Definitions: Comprehensive definitions of technical and legal terms used throughout the agreement

4. Sale and Purchase Obligations: Core obligations regarding the sale and purchase of electricity, including minimum take-or-pay provisions

5. Term and Termination: Duration of the agreement, conditions for extension, and termination rights

6. Price and Payment: Tariff structure, payment terms, invoicing procedures, and payment security mechanisms

7. Metering and Testing: Requirements for measuring delivered electricity, testing procedures, and dispute resolution for measurements

8. Construction and Commercial Operation: Requirements for facility construction, testing, and achieving commercial operation date

9. Operating Requirements: Performance standards, dispatch requirements, and maintenance obligations

10. Force Majeure: Definition of force majeure events and their consequences

11. Default and Remedies: Events of default, cure periods, and available remedies

12. Representations and Warranties: Standard and specific representations and warranties from both parties

13. Insurance: Required insurance coverage and related obligations

14. Assignment and Change of Control: Restrictions and conditions for transfer of rights or change in ownership

15. Dispute Resolution: Procedures for resolving disputes, including governing law and jurisdiction

16. Confidentiality: Protection of confidential information and permitted disclosures

17. Notices: Process for formal communications between parties

18. Miscellaneous: Standard boilerplate provisions including severability, entire agreement, and amendments