Bankability Concerns: Model PPAs for Solar Power Projects
On 12 September 2017, the Ministry of Industry and Trade (MOIT) issued Circular No. 16 with a set of templates for model power purchase agreements (Model PPA) for grid-connected projects and rooftop projects.
The Model PPA for grid-connected solar power projects generally adopts similar template and terms as used in the existing model PPAs for wind, biomass and solid waste. Compared to the previous draft of this solar PPA, released in April 2017, Circular No. 16 removes specific provisions on lenders' step-in-rights. In addition, most of the MOIT's improvements to the previous draft are minor, leaving certain major issues unresolved, which may have an impact on the bankability of large utility-scale solar power plants on a "project finance" basis.
In relation to rooftop projects, Circular No. 16 includes separate templates of Model PPAs. These govern the sale and purchase of electricity under net-metering schemes for rooftop projects equipped with bi-directional meter systems.