Contract For Differences PPA Template for Philippines

The Contract for Differences PPA is increasingly utilized in the Philippine power sector as a sophisticated mechanism to manage price volatility while ensuring project bankability. This document type is particularly relevant for new power projects, especially renewable energy facilities, seeking revenue stability while participating in the WESM. The agreement combines elements of traditional PPAs with financial derivative features, establishing a strike price and settlement mechanism based on market reference prices. The document must comply with Philippine regulations, including EPIRA, the Renewable Energy Act, and relevant ERC issuances. It typically includes detailed provisions for calculation methodologies, settlement procedures, credit support requirements, and market disruption events. The Contract for Differences PPA structure is especially valuable for project-financed facilities requiring stable revenue streams while maintaining market participation.

1. Parties: Identification of the Generator/Seller and Offtaker/Buyer, including their legal details and authorized representatives

2. Background: Context of the agreement, including project details, relevant regulatory framework, and purpose of the CfD structure

3. Definitions and Interpretation: Detailed definitions of terms used in the agreement, including technical, financial, and market-specific terminology

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

5. CfD Payment Mechanism: Core section detailing the strike price, reference price, calculation of difference payments, and settlement procedures

6. Metering and Settlement: Requirements for measuring electricity output and procedures for calculating and verifying settlements

7. Facility Requirements: Technical specifications, performance standards, and operational requirements for the generating facility

8. Generation and Dispatch: Rules governing electricity generation, dispatch obligations, and interaction with the grid/WESM

9. Billing and Payment: Procedures for invoicing, payment timing, currency, and payment dispute resolution

10. Force Majeure: Definition of force majeure events and their consequences on parties' obligations

11. Default and Termination: Events of default, cure periods, termination rights, and consequences of termination

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

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

14. General Provisions: Standard boilerplate clauses including notices, amendments, assignments, and confidentiality