Virtual Power Purchase Agreement Template for Nigeria

Virtual Power Purchase Agreements have emerged as crucial instruments for corporate renewable energy procurement in Nigeria's evolving electricity market. These agreements enable corporate buyers to support renewable energy development while managing electricity price volatility through financial settlements, without requiring physical delivery of electricity. The VPPA structure is particularly valuable in the Nigerian context where direct power purchase options may be limited by grid infrastructure or regulatory constraints. The document addresses key aspects including price hedging mechanisms, renewable energy certificates, settlement calculations, and risk allocation, while ensuring compliance with Nigerian electricity regulations, local content requirements, and foreign exchange rules. This agreement type is typically used by large corporate consumers seeking to meet sustainability goals and manage electricity costs, while providing revenue certainty to renewable energy project developers.

1. Parties: Identification of the contracting parties - typically the renewable energy project company (seller) and the corporate buyer

2. Background: Context of the agreement, including project details and parties' objectives

3. Definitions: Detailed definitions of technical, commercial, and legal terms used throughout the agreement

4. Term and Conditions Precedent: Duration of the agreement and conditions that must be satisfied before the agreement becomes effective

5. Sale and Purchase Obligations: Core commercial obligations including settlement mechanisms, strike price, and quantity commitments

6. Renewable Energy Certificates: Provisions regarding the creation, transfer, and ownership of renewable energy certificates or similar environmental attributes

7. Metering and Reporting: Requirements for measuring and reporting electricity generation and calculations for settlement

8. Payment Terms: Detailed payment obligations, timing, and mechanisms for financial settlement

9. Force Majeure: Events excusing performance and procedures for handling force majeure situations

10. Change in Law: Provisions addressing regulatory changes and their impact on the agreement

11. Default and Termination: Events of default, remedies, and termination rights

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

13. Confidentiality: Obligations regarding confidential information

14. Representations and Warranties: Standard and specific warranties from each party

15. Assignment and Change of Control: Rights and restrictions regarding transfer of the agreement or change in party ownership

16. Notices: Procedures for formal communications between parties

17. Boilerplate Provisions: Standard legal provisions including entire agreement, amendments, and severability