Third Party Power Purchase Agreement Template for Indonesia

The Third Party Power Purchase Agreement serves as the primary commercial agreement in independent power projects in Indonesia, establishing the long-term relationship between power producers and purchasers. This document is essential for power generation projects where an independent entity generates electricity for sale to either the state utility company (PLN) or private off-takers under Indonesia's electricity regulatory framework. It includes detailed provisions covering technical, commercial, and legal aspects of power generation and sale, incorporating requirements from Indonesian electricity laws and regulations. The agreement is particularly relevant for both conventional and renewable energy projects, requiring careful consideration of local content requirements, environmental regulations, and specific Indonesian market conditions. It typically involves significant investment and long-term commitments, making it a crucial document for project financing and development in Indonesia's energy sector.

1. Parties: Identification of the power producer, purchaser, and any guarantors

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

3. Definitions and Interpretation: Comprehensive definitions of technical and legal terms, rules of interpretation

4. Sale and Purchase Obligations: Core obligations regarding electricity supply and purchase commitments

5. Term and Effectiveness: Duration of the agreement, conditions precedent, and effective date

6. Facility Construction and Development: Requirements for building and commissioning the power generation facility

7. Testing and Commissioning: Procedures for testing and commissioning the facility

8. Operating Standards and Performance Requirements: Technical standards, performance guarantees, and operational requirements

9. Metering and Recording: Requirements for measuring and recording electricity delivery

10. Billing and Payment: Payment terms, invoicing procedures, and dispute resolution for payments

11. Force Majeure: Definition and consequences of force majeure events

12. Change in Law: Procedures for handling regulatory changes affecting the agreement

13. Default and Termination: Events of default, cure periods, and termination procedures

14. Liability and Indemnification: Allocation of risks and responsibilities between parties

15. Insurance: Required insurance coverage and related obligations

16. Assignment and Security: Rules for assignment and creation of security interests

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

18. Confidentiality: Protection of confidential information

19. Notices: Communication procedures between parties

20. Miscellaneous: Standard boilerplate provisions including severability, entire agreement, etc.