Guidelines for determination of tariff & SBD for ... - Ministry of Power

Standard PPA for … [Insert ‘medium’ or ‘long’, as applicable] term power procurement under Case -1
into separate Agreement(s) to Hypothecate Cum Deed of Hypothecation, whereby the
Procurer(s) shall agree to hypothecate, to the Seller, effective from forty five (45) days
prior to the Scheduled Delivery Date or Revised Scheduled Delivery Date, as the case
maybe, the amounts to the extent as required for the Letter of Credit as per Article 8.4.2
routed through the Default Escrow Account(s) and the Receivables in accordance with
the terms of the Agreement to Hypothecate Cum Deed of Hypothecation. The Default
Escrow Agreement(s) and the Agreement(s) to Hypothecate Cum Deed of
Hypothecation are collectively referred to as the “Collateral Arrangement(s)”. The
minimum revenue flow in any Month in the Default Escrow Account(s) shall be at least
equal to the amount required for the Letter of Credit as per Article 8.4.2.
Provided that the Procurer(s) shall ensure that the Seller has first ranking charge on the
revenues routed through the Default Escrow Account(s) and the ‘Receivables’ in
accordance with the terms of the Agreement(s) to Hypothecate Cum Deed of
Hypothecation. However, such first ranking charge shall be on the amounts, in excess of
amounts, which have already been charged or agreed to be charged prior to the date of
the execution of the Default Escrow Agreement(s).
8.4.11.2 [Insert only in case of long term procurement] On the occurrence of all of the
following events in respect of a Procurer:
i. A period of not less than twenty-four (24) Months from Delivery Date, has elapsed;
and
ii. The Procurer has achieved, for its ability to honour its Tariff Payment obligations to
the Seller under this Agreement, a credit rating of ‘A’ or better, from a SEBI
registered Indian credit rating agency, consistently for a period of at least three (3)
years; and
iii. Immediately prior to the three (3) year period mentioned in sub-article (ii) above,
for a period of at least twelve (12) Months there has been no Procurer Event of
Default under Article 11 of this Agreement,
the Procurer shall intimate the Seller in writing of the occurrence of the same and its
intention to discontinue the Collateral Arrangement. If the Seller desires to continue
with the Collateral Arrangement, it shall intimate the same to the Procurer(s) in writing
within thirty (30) days of receipt of intimation from the Procurer(s) and in such case the
Seller shall be liable to bear the costs of continuation of the Collateral Arrangement
with effect from such date. In case the Seller fails to respond or agrees to discontinue,
the Collateral Arrangement shall forthwith cease and the Default Escrow Agreement(s)
and the Agreement(s) to Hypothecate Cum Deed of Hypothecation shall stand
terminated as per terms thereof.
Provided that in case of any of conditions mentioned under (i), (ii) or (iii) in Article
8.4.11.2 ceases to be true, then within ninety (90) days of the occurrence of such event,
the Procurer shall reinstate the Collateral Arrangement, at its own cost.
8.4.11.3 If the Letter of Credit is insufficient to pay for the due payments to the Seller or is not
replenished for the drawals made, then within a period of seven (7) days from the date
such shortfall in the Letter of Credit occurs, the Letter of Credit shall be reinstated to
…….[Insert name of Procurer(s)] 50