DATED JANUARY 19, 2007
(1) ORPOWER 4 INC.
(2) THE KENYA POWER AND LIGHTING COMPANY LIMITED
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AMENDED AND RESTATED POWER PURCHASE AGREEMENT
FOR
OLKARIA III GEOTHERMAL PLANT
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i
CONTENTS
CLAUSE PAGE
------ ----
Clause 1: Amendment and Restatement, Definitions and Interpretation .... 2
Clause 2: Scope and Duration ........................................... 13
Clause 3: Conditions Precedent and Security ............................ 14
Clause 4: Site ......................................................... 17
Clause 5: Geothermal Reservoir Appraisal and Development ............... 18
Clause 6: Construction ................................................. 20
Clause 7: Commissioning and Testing .................................... 23
Clause 8: Operating and Despatch Procedures ............................ 25
Clause 9: Maintenance and Repair ....................................... 27
Clause 10: Sale and Purchase of Electricity ............................. 30
Clause 11: Invoicing and Payment ........................................ 31
Clause 12: Metering ..................................................... 32
Clause 13: Insurance .................................................... 34
Clause 14: Undertakings and Warranties of the Parties ................... 34
Clause 15: Force Majeure ................................................ 36
Clause 16: Termination and Default ...................................... 38
Clause 17: Indemnification and Liability ................................ 40
Clause 18: Confidentiality .............................................. 40
Clause 19: Dispute Resolution ........................................... 41
Clause 20: Maintenance and Operating Records ............................ 43
Clause 21: Miscellaneous Provisions ..................................... 44
Clause 22: Governing Law ................................................ 47
ii
SCHEDULES
List of Abbreviations ................................................... 48
Schedule 1: Appraisal Programme ........................................ 51
Schedule 2: Facilities to be installed by KPLC and the Seller .......... 52
Part A: Functional Specification of the Plant ........... 52
Part B: The Seller's Connection Facilities including the
Transmission Interconnector and KPLC's
Connection Facilities ........................... 66
Part C: Design Criteria - Transmission Interconnector ... 67
Part D: Metering Equipment .............................. 96
Part E: Delivery Point .................................. 98
Part F: Rated Capacity .................................. 99
Figure 1 General Map of the Area ........................ 100
Figure 2 Map Showing the Licence Area ................... 101
Figure 3 Diagram of Early Generation Facility ........... 102
Figure 4 Diagram of Plant ............................... 103
Schedule 3: Maintenance Allowances of the Early Generation Facility and
the Plant .................................................. 104
Schedule 4: Procedures ................................................. 106
Part A: Commissioning and Testing Procedures ............ 106
Part B: Meter Procedures ................................ 111
Part C: Operating and Despatch Procedures ............... 114
Figure 5 Correction Curves .............................. 117
Schedule 5: Payment .................................................... 118
Part A: Early Generation Tariff ......................... 118
Part B: Plant Tariff .................................... 124
Part C: Invoicing ....................................... 132
Part D: Consumer Prices Index ........................... 133
Schedule 6: Conditions Precedent ....................................... 134
Part A: Preconditions of the Seller ..................... 134
Part B: Preconditions of KPLC ........................... 134
Schedule 7: Construction Programme ..................................... 135
Schedule 8: Parties' Addresses and Notice Details ...................... 136
Schedule 9: Insurance .................................................. 137
Part A: Construction Period ............................. 137
Part B: Operating Period ................................ 140
Schedule 10: Site Agreement ............................................. 142
Schedule 11: Electricity Regulatory Board Approvals
iii
THIS AMENDED AND RESTATED POWER PURCHASE AGREEMENT is made on January 19, 2007
BETWEEN
(1) OrPower 4 Inc. a company incorporated in the Grand Cayman Islands, British
West Indies, with its registered office in Grand Cayman, British West
Indies, with an office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ and
which will act through its branch at Off Moi South Lake Road, Hellsgate
National Park, P.O. Box 1566-20117, Naivasha, Kenya ("the Seller"); and
(2) The Kenya Power and Lighting Company Limited a company incorporated in
Kenya with its registered office at ▇▇▇▇▇ ▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇▇-▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ("KPLC").
WHEREAS
A. KPLC is entitled to purchase electricity generating capacity and to
transmit and distribute electricity in the Republic of Kenya;
B. Pursuant to a Request for Proposals ("RFP") dated 5th July 1996 and issued
by MOE, the Seller has submitted an offer which has been accepted following
the due process of the RFP;
C. Pursuant to the RFP the Seller as the successful bidder was required to and
entered into a power purchase agreement with KPLC;
D. KPLC and OrPower 4 entered into the original Power Purchase Agreement dated
5 November 1998, and subsequently entered into the First Supplemental
Agreement dated 21 July 2000 modifying the terms of the original Power
Purchase Agreement, and the Second Supplemental Agreement dated 17 April
2003 modifying the terms of the original Power Purchase Agreement and of
the First Supplemental Agreement;
E. The Parties wish to reinstate certain of the changes from the First
Supplemental Agreement and the second Supplemental Agreement to the
original Power Purchase Agreement and to amend such agreement further;
F. This Agreement is the amended and restated power purchase agreement agreed
between the Parties, and which supersedes the original Power Purchase
Agreement dated 5 November 1998, the First Supplemental Agreement dated 21
July 2000, and the Second Supplemental Agreement dated 17 April 2003.
IT IS HEREBY AGREED as follows:
1
CLAUSE 1: AMENDMENT AND RESTATEMENT, DEFINITIONS AND INTERPRETATION
1.1 AMENDMENT AND RESTATEMENT
With effect from the Signature Date, the original Power Purchase Agreement dated
5 November 1998, the First Supplemental Agreement dated 21 July 2000, and the
Second Supplemental Agreement dated 17 April 2003 between the Parties, inclusive
of all schedules thereto, shall be amended and restated in their entirety by
this Amended and Restated Power Purchase Agreement Power Purchase Agreement.
DEFINED TERMS:
In this Agreement, including the recitals, unless the context otherwise
requires, the following words and expressions shall have the following meanings:
"AGREEMENT" OR "PPA": this Amended and Restated Power Purchase Agreement
together with all schedules hereto as the same may be supplemented or amended
from time to time;
"ANSI": American National Standards Institute;
"API": American Petroleum Institute;
"APPRAISAL PERIOD": the period specified in the Appraisal Programme for the
conduct of the Appraisal Works;
"APPRAISAL PROGRAMME": the programme for the drilling of ▇▇▇▇▇ and the conduct
of other works to appraise the reserves and productivity of the Reservoir set
out in Schedule 1, as from time to time adjusted by the Parties in accordance
with this Agreement;
"APPRAISAL WORKS": the drilling and other works specified in the Appraisal
Programme;
"ASHRAE": American Society of Heating, Refrigerating and Air-Conditioning
Engineers;
"ASME": American Society of Mechanical Engineers;
"AUTHORISATIONS": any approval, consent, licence, permit, authorisation or other
permission granted by a Governmental Authority;
"AVAILABILITY FAILURE": a failure of any Settlement Period to deliver
electricity in accordance with a valid Despatch Instruction which Despatch
Instruction does not exceed the Declared Capacity, other than as a result of an
event on KPLC's System which was not caused by the Seller or any event of Force
Majeure;
"AVAILABLE EARLY GENERATION CAPACITY": the capacity of the Early Generation
Facility assumed to be Available in any Settlement Period being the Declared
Capacity unless there has been an Availability Failure in that Settlement Period
in which event the Available Early Generation Capacity shall be the average
Early Generation Availability achieved in response to Despatch Instructions for
that Settlement Period;
2
"AVAILABLE PLANT CAPACITY": the capacity of the Plant assumed to be Available in
any Settlement Period being the Declared Capacity unless there has been an
Availability Failure in that Settlement Period in which event the Available
Plant Capacity shall be the average Plant Availability achieved in response to
Despatch Instructions for that Settlement Period;
"BACK-UP METERING EQUIPMENT": prior to the Full Commercial Operation Date, back
up equipment for metering and monitoring the operation and output of the Early
Generation Facility as may be supplied by KPLC and installed by the Seller as
specified in Part D of Schedule 2 and from the Full Commercial Operation Date,
back up equipment for metering and monitoring the output of the Plant as
supplied by KPLC and installed by the Seller as specified in Part D of Schedule
2;
"BID SECURITY": an on-demand performance bond in the amount of two hundred and
fifty thousand United States Dollars (US$250,000) drawn on an internationally
recognised bank;
"CAPACITY PAYMENTS": the amounts payable by KPLC in respect of the Contracted
Early Generation Capacity or Contracted Plant Capacity (as the case may be) in
accordance with Parts A and B of Schedule 5;
"CHANGE IN LAW": shall mean the adoption, promulgation, or modification after
the Signature Date of any Legal Requirement or the imposition upon the Seller of
any material condition in connection with the issuance, renewal, extension,
replacement or modification of any Authorisation after the Signature Date that
in either case establishes requirements for the design, construction, operation
or maintenance of the Plant or of the Geothermal Reservoir Development that are
materially more restrictive than the most restrictive requirements in effect as
of the Signature Date;
"COMMISSIONING": taking all steps necessary to put the Early Generation
Facility, the Plant and the Transmission Interconnector, as appropriate, into
operation including carrying out tests prior to operation as specified in Part A
of Schedule 4;
"CONFIDENTIAL INFORMATION": has the meaning ascribed thereto in Clause 18.1;
"CONNECTION FACILITIES": the connection facilities to be installed by the Seller
and KPLC as specified in Part B of Schedule 2;
"CONSTRUCTION BOND": an on-demand construction bond in the amount of one million
United States Dollars (US$1,000,000) drawn on an internationally recognised
bank;
"CONSTRUCTION PROGRAMME": the programme for the design, procurement,
construction, installation and commissioning of the Early Generation Facility
and the Plant set out in Schedule 7 and commencing on the Effective Date, as
from time to time adjusted by agreement of the Parties;
"CONSUMER PRICES INDEX OR CPI": the index known as "The Consumer Prices Index
for All Urban Consumers (CPI-U) for the US City Average for All Items 1982-84 =
100" as published by the United States Department of Labor, Bureau of Labor
Statistics, or such other index as the Parties may agree pursuant to Part D of
Schedule 5 or such replacement index as may be determined by an Expert which
replacement index shall take effect from such date as the Expert shall
determine;
3
"CONTRACTED EARLY GENERATION CAPACITY": the capacity of the Early Generation
Facility at the reference conditions specified in paragraph 1.2(b)(ii) of Part A
of Schedule 2 being at the Signature Date twelve (12) MW or such other amount as
may be determined from time to time pursuant to Clauses 9.8, 9.10 and 9.11;
"CONTRACTED EARLY GENERATION CAPACITY TEST": a test of the normal full-load
capacity of the Early Generation Facility carried out in accordance with the
requirements of paragraph 3(b)(ii) of Part A of Schedule 4;
"CONTRACTED PLANT CAPACITY": the capacity of the Plant at the reference
conditions specified in paragraph 1.2(b)(ii) of Part A of Schedule 2 being at
the Signature Dated forty-eight (48) MW or such other amount as may be agreed or
determined from time to time pursuant to Clauses 5.4, 9.8A, 9.10 and 9.11;
"CONTRACTED PLANT CAPACITY TEST": a test of the normal full load capacity of the
Plant carried out in accordance with the requirements of paragraph 3(b)(ii) of
Part A of Schedule 4;
"DAILY LIQUIDATED DAMAGES SUM": an amount of US$0.50 per kW of Contracted Early
generation Capacity or Contracted Plant Capacity as the case may be;
"DECLARED CAPACITY": in respect of a Settlement Period the Early Generation
Capacity or Plant Capacity (as the case may be) declared by the Seller to be
Available for that Settlement Period in accordance with the Operating and
Despatch Procedure;
"DEFAULT": any one or more of the events specified in Clauses 16.1 and 16.2;
"DEFAULT RATE": two (2) percentage points above LIBOR;
"DELIVERY POINT": the point of common coupling on KPLC's System at which the Net
Electrical Output from the Early Generation Facility or the Plant (as the case
may be) is delivered and shall be the point specified in Part E of Schedule 2;
"DESPATCH INSTRUCTION": prior to the Full Commercial Operation Date, an
instruction given by KPLC to the Seller in relation to the operation of the
Early Generation Facility in accordance with Clause 8.3 and from the Full
Commercial Operation Date, an instruction given by KPLC to the Seller in
relation to the operation of the Plant in accordance with Clause 8.3;
"DIN": Deutsches Institut fur Normung (German standards institute);
"EARLY GENERATION AVAILABILITY": the ability of the Early Generation Facility
over a period of time, to deliver electricity to KPLC's System at the Delivery
Point and the terms "Available" and "Unavailable" as used in the context of the
Early Generation Facility shall be construed accordingly;
"EARLY GENERATION CAPACITY": the capacity of the Early Generation Facility,
expressed in MW to generate and deliver electricity at the Delivery Point
assuming the continued connection and proper operation of KPLC's System;
4
"EARLY GENERATION CESSATION DATE": has the meaning ascribed thereto in Clause
6.1A;
"EARLY GENERATION COMMERCIAL OPERATION DATE": the date specified as such by the
Seller in accordance with Clause 7.9;
"EARLY GENERATION COMMERCIAL OPERATION TESTS": the respective tests to be
carried out on the Early Generation Facility, as specified in paragraph 3 of
Part A of Schedule4;
"EARLY GENERATION COMMISSIONING DATE": the date specified in the Construction
Programme as the target date for the start of Commissioning of the Early
Generation Facility, or such earlier date as the Seller may specify by notice to
KPLC not less than thirty (30) days before such earlier date subject to KPLC's
agreement to such earlier date which agreement shall not be unreasonably
withheld;
"EARLY GENERATION FACILITY": the generating facility with the Contracted Early
Generation Capacity described in paragraph 4 of Part A of Schedule 2, including
the Seller's 33 kV interconnection to the Early Generation Interconnection Point
and all transformers and associated equipment, relay and switching equipment,
and protective devices (adjusted to the settings agreed between KPLC and the
Seller pursuant to paragraph 4 Part A of Schedule 4) and all safety equipment;
"EARLY GENERATION FACILITY TESTS": the Contracted Early Generation Capacity Test
and Reliability Run Test;
"EARLY GENERATION INTERCONNECTION POINT": the physical point where the Early
Generation Facility and KPLC's transmission Interconnector are connected as
specified in Part E of Schedule 2;
"EARLY GENERATION LONG STOP COMMERCIAL OPERATION DATE": the date twenty-one (21)
months after the Effective Date or such other date as may be determined pursuant
to the provisions of this Agreement;
"EARLY GENERATION SITE": the land on which the Early Generation Facility shall
be located prior to the Full Commercial Operation Date;
"EFFECTIVE DATE": has the meaning ascribed thereto in Clause 3.1;
"EMERGENCY": a condition or situation that, in the sole but reasonable opinion
of KPLC, does materially and adversely, or is likely to materially and adversely
(i) affect the ability of KPLC to maintain a safe, adequate and continuous
electrical service to its customers, having regard to the then current standard
of electrical service provided to its customers, or (ii) present a physical
threat to persons or property for the security, integrity or reliability of
KPLC's System;
"ENERGY CHARGES": the amounts payable by KPLC in respect of the Net Electrical
Output as specified in Parts A and B Schedule 5;
"ESTABLISHMENT DATE": the date by which the last of the following activities and
events have occurred (except, with respect to Subclauses (ii), (iii) and (iv),
to the extent waived by the benefiting Party):
5
(i) the Amended and Restated Power Purchase Agreement and the Olkaria III
Project Security Agreement have been duly executed and delivered by
the Parties after receipt of all necessary approvals;
(ii) the initial Letter of Credit has been issued in its full amount in
favour of and delivered to the Seller;
(iii) the Construction Bond has been issued in its full amount in favour of
and delivered to KPLC as described in Clause 3.6 hereto; and
(iv) the Electricity Regulatory Board will have approved KPLC's
application for pass through of the component of the Capacity Charges
provided under Parts A and B of Schedule 5, or as may be otherwise
agreed by KPLC and approved by the Electricity Regulatory Board.
"EVENT": has the meaning ascribed thereto in Part D of Schedule 5;
"EVENT OF DEFAULT": a failure by KPLC or the Seller to remedy a Default in
accordance with Clause 16.4;
"EXPERT": a person appointed in accordance with the provisions of Clause 19.2;
"FINANCING AGREEMENTS": the agreements relating to the provision of finance for
the construction of the Plant to be entered into between the Seller and banks or
other financial institutions;
"FORCE MAJEURE": has the meaning ascribed thereto in Clause 15.1;
"FULL COMMERCIAL OPERATION DATE": the date specified as such by the Seller in
accordance with Clause 7.10;
"FUNCTIONAL SPECIFICATION": the respective functional specifications for the
Early Generation Facility and the Plant as set out in Part A of Schedule 2;
"GEOTHERMAL RESERVOIR DEVELOPMENT": the works and operations required to be
carried out pursuant to Clauses 5.10 and 5.10A;
"GOK": The Government of the Republic of Kenya;
"GOOD FAITH DISPUTE PROCEDURE": means the procedure for resolution of disputes
or differences described in Clause 19.1;
"GOVERNMENTAL AUTHORITY": GOK, GOK owned or controlled corporations or
governmental agency, division or department or other authority including
regional or local authorities of Kenya;
"GWH": gigawatt hour being one thousand (1000) MWh;
"IEC": International Electrotechnical Commission;
6
"IEEE": Institute of Electrical and Electronic Engineers;
"ISO": International Organisation for Standardisation;
"INTERCONNECTION POINT": the point of interconnection between the Transmission
Interconnector and KPLC's Connection Facilities as specified in Part E of
Schedule 2;
"INTERNATIONALLY APPLICABLE ENGINEERING STANDARDS": the latest issue of relevant
internationally recognised European, North American, Japanese or New Zealand
codes, practices and standards and the World Bank Environmental Guidelines, all
as specified in Part A of Schedule 2;
"KENGEN": the Kenya Electricity Generating Company Limited;
"KPLC'S CONNECTION FACILITIES": the equipment and facilities relating to the 220
kV substation at Olkaria II specified in Part B of Schedule 2;
"KPLC'S SYSTEM": the high voltage transmission system operated by KPLC, and the
distribution system(s) and ancillary electrical plant and equipment connected to
such transmission system;
"KPLC'S TRANSMISSION INTERCONNECTOR": the 33 kV interconnector specified in Part
A of Schedule 2 connecting the Early Generation Interconnection Point to KPLC's
System;
"KV": kilovolt, one thousand (1000) Volts;
"KW": kilowatts, one thousand (1000) ▇▇▇▇▇;
"KWH": kilowatt hour, one thousand (1000) Watt hours;
"LEGAL REQUIREMENT": any statute, law, regulation or other legislation, or any
order or directive of any Governmental Authority having jurisdiction in respect
of this Agreement or either Party;
"LETTER OF CREDIT": has the meaning ascribed to it in the Olkaria III Project
Security Agreement;
"LIBOR": in respect of any day, the offered rate for Unites States Dollars
quoted by Barclays Bank plc London or such other bank as the Parties shall from
time to time agree, to prime banks in the London Interbank Market at 11:00 hours
(London time) for a deposit of a principal sum equivalent to the sum n question
for a period commencing on such day and ending seven (7) days later provided
that if the said rate is not quoted on any day the rate last quoted shall be
used;
"LICENCE AREA": that area marked on Figure 1 of Schedule 2 Part A for indicative
purposes only being that area of land in the Universal Transverse Mercator (UTM)
Grid Zone 37, located on Map Series Y731 (D.O.S 423) Sheets 133/3 and 133/4,
Sakutiek and Longonot, published by GOK in 1975, enclosed by straight lines
joining adjacent points having the following co-ordinates:
▇
▇▇▇▇ (▇▇▇▇▇▇) ▇▇▇▇▇ (▇▇▇▇▇▇)
------------- --------------
192 000 9 901 100
192 000 9 903 100
196 400 9 903 100
196 400 9 900 000
193 900 9 900 000;
"LONG STOP APPRAISAL WORKS START DATE": the date three (3) months after the
Effective Date;
"LONG STOP CONSTRUCTION START DATE": the date twenty-seven (27) months after the
Effective Date or such other date as may be determined pursuant to the
provisions of this Agreement;
"LONG STOP DATE": any of the Early Generation Long Stop Commercial Operation
Date, the Long Stop Appraisal Works Start Date, the Long Stop Construction Start
Date, the Long Stop Effective Date and the Long Stop Full Commercial Operation
Date;
"LONG STOP EFFECTIVE DATE": the date eighteen (18) months after the Signature
Date;
"LONG STOP FULL COMMERCIAL OPERATION DATE": the date falling thirty-six (36)
months after the Establishment Date, subject to an extension, at the Seller's
option, on a day by day basis for each day of Force Majeure, and for each day to
the extent by which a failure by KPLC to perform any of its obligations under
the PPA delays the Seller from achieving Full Commercial Operation prior to such
date;
"MAIN METERING EQUIPMENT": prior to the Full Commercial Operation Date, the main
metering equipment for metering and monitoring the operation and output of the
Early Generation Facility as supplied and installed by the Seller as specified
in Part D of Schedule 2 and from the Full Commercial Operation Date, the main
metering equipment for metering the output of the Plant as supplied and
installed by the Seller as specified in Part D of Schedule 2;
"METERING PARTY": has the meaning ascribed thereto in Clause 12.1;
"METERING SYSTEM": prior to the Full Commercial Operation Date, equipment for
metering and monitoring the operation and output of the Early Generation
Facility and from the Full Commercial Operation Date, equipment for metering and
monitoring the operation and output of the Plant as specified in Part D of
Schedule 2 which in both cases shall consist of the Main Metering Equipment, the
Back-Up Metering Equipment and all associated equipment;
"MOE": the Ministry of Energy of the Republic of Kenya;
"MW": megawatt, one thousand (1000) kW;
"MWH": megawatt hour, one thousand (1000) kWh;
8
"NET ELECTRICAL OUTPUT": prior to the Full Commercial Operation Date,
electricity generated by the Early Generation Facility and delivered to KPLC at
the Delivery Point, and from the Full commercial Operation Date, electricity
generated by the Plant and delivered to KPLC at the Delivery Point, in both
cases net of all consumption (including imports and the Seller's Steam Field
Facilities) and of losses before the Delivery Point, or (where the context so
requires) a quantity (in kWh) of electricity so delivered;
"NON-DEFAULT RATE": LIBOR;
"NON-METERING PARTY": has the meaning ascribed thereto in Clause 12.2;
"NOTICE OF LIMITED RESERVOIR CAPACITY": the notice that may be given by the
Seller to KPLC pursuant to Clause 5.7;
"OLKARIA I": the geothermal power station and site owned by KenGen and known as
'Olkaria I';
"OLKARIA II": the geothermal power station and site owned by KenGen and to be
known as 'Olkaria II';
"OLKARIA III PROJECT SECURITY AGREEMENT": the agreement entered into by the
Parties on the Signature Date providing security to the Seller in respect of
KPLC's payment obligations under Clause 11 of this Agreement, as the same may be
supplemented or amended from time to time;
"OPERATING CHARACTERISTICS": the respective performance and operating
characteristics of the Early Generation Facility or the Plant for which values
are specified in the Functional Specification;
"OPERATING AND DESPATCH PROCEDURES": the procedures set out in Part C of
Schedule 4 and such further procedures as shall apply pursuant to Clauses 8.4
and 8.5;
"OPERATING AND MAINTENANCE AGREEMENT": the agreement entered into by the Seller
for the operation and maintenance of the Early Generation Facility and the
Plant;
"OPERATING PERIOD": the period from the Full Commercial Operation Date until the
end of the Term;
"OPERATING YEAR": a period of one (1) year beginning on the Full Commercial
Operation Date or any anniversary thereof;
"PARTIES": KPLC and the Seller and "PARTY" means either of them;
"PLANNED MAINTENANCE": maintenance of the Early Generation Facility or the Plant
(as the case may be) which has been planned in accordance with Clause 9.3, or
where the context admits the period allowed or the dates planned for such
maintenance;
"PLANT": the plant (consisting after the Early Generation Cessation Date, of the
Early Generation Facility and other equipment) described in Part A of Schedule
2, and including, where appropriate, the Seller's Connection Facilities, and the
Metering System;
9
"PLANT ANNUAL TARGET OUTPUT": has the meaning ascribed thereto in paragraph 7 of
Part B of Schedule 5;
"PLANT AVAILABILITY": the ability of the Plant over a particular period of time,
to deliver electricity to KPLC's System at the Delivery Point and the terms;
"AVAILABLE" and "UNAVAILABLE": as used in the context of the plant shall be
construed accordingly;
"PLANT CAPACITY": the capacity of the Plant, expressed in MW, to generate and
deliver electricity at the Delivery Point assuming the continued connection and
proper operation of KPLC's System;
"PLANT COMMERCIAL OPERATIONS TESTS": the respective tests to be carried out on
the Plant, as specified in paragraph 3 of Part A of Schedule 4;
"PLANT COMMISSIONING DATE": the date specified in the Construction Programme as
the target date for the start of Commissioning of the Plant, or such earlier
date as the Seller may specify by notice given to KPLC not less than thirty (30)
days before such earlier date subject to KPLC's agreement to such earlier date
which agreement shall not be unreasonably withheld;
"PROJECT AGREEMENTS": the Operating and Maintenance Agreement, the Site
Agreement, and the Turnkey Construction Agreement;
"PRUDENT OPERATING PRACTICE": in relation to either Party, standards of practice
obtained by exercising that degree of skill, diligence, prudence and foresight
which could reasonably be expected from a skilled and experienced operator
engaged in the same type of undertaking under the same or similar circumstances;
"RATED CAPACITY": the respective electrical output ratings of the Early
Generation Facility and the Plant as set forth in Part F of Schedule 2;
"RELIABILITY RUN TEST": has the meaning ascribed thereto in paragraph 3(b)(I)
and 3(b)(iii) Schedule 4;
"REMEDIAL PROGRAMME": has the meaning ascribed thereto in Clause 16.4(a)(ii);
"REQUIRED EARLY GENERATION COMMERCIAL OPERATION DATE": the date eighteen (18)
months after the Effective Date or such other date as may be determined in
accordance with this Agreement;
"REQUIRED FULL COMMERCIAL OPERATION DATE": the date twenty (20) months and two
(2) weeks after the Establishment Date, subject to extension, at the Seller's
option, on a day by day basis for each day of Force Majeure, and for each day by
the extent to which a failure by KPLC to perform any of its obligations under
the PPA delays the Seller from achieving Full Commercial Operation prior to such
date;
"RESERVOIR": the subsurface body of hot water and steam located under the
Licence Area;
10
"SCADA": Supervisory Control and Data Acquisition;
"SELLER'S CONNECTION FACILITIES": the Connection Facilities to be installed by
the Seller in accordance with Parts B and C of Schedule 2;
"SELLER'S STEAM FIELD FACILITIES": the Steam Field Facilities to be installed by
the Seller pursuant to this Agreement;
"SETTLEMENT PERIOD": a period of thirty (30) minutes beginning on the hour or
the half-hour;
"SIGNATURE DATE": the date of this Agreement;
"SITE": the land on which the Plant shall be installed by the Full Commercial
Operation Date;
"SITE AGREEMENT": the agreement substantially in the form specified in Schedule
10 and in accordance with Clause 4 which is to be entered into between a
Governmental Authority and the Seller permitting the Seller to acquire such
rights in the Licence Area as shall enable the Seller to perform its obligations
under this Agreement;
"STEAM FIELD FACILITIES": equipment, plant and facilities above ground and
underground, including ▇▇▇▇▇, used in connection with the exploration,
appraisal, development and operation of geothermal reservoirs for electricity
generation;
"SYSTEM CHARACTERISTICS": has the meaning ascribed thereto in paragraph 4.3(a)
of Part A of Schedule 2;
"TARGET EFFECTIVE DATE": the date three (3) months after the Signature Date or
such other date as the Parties may agree;
"TARGET ESTABLISHMENT DATE": 15th December 2006;
"TAXES AND DUTIES": all forms of taxation, impost, levy or duty (including
without limitation, value added tax) imposed pursuant to the laws of the
Republic of Kenya in respect of the sale of electricity or on the purchase,
import and use or consumption of any real property, services, plant, equipment
or materials used in connection therewith or in respect of the right or act of
making capacity available or producing, delivering or transmitting electricity
which result directly or indirectly in an increase or decrease in the
construction, financing, operation or maintenance costs of the Seller in
performing its obligations under this Agreement provided that for the avoidance
of doubt Taxes and Duties do not include any form of taxation, impost, levy or
duty imposed on the income of the Seller upon which income tax is chargeable
under section 3(2) of the Income Tax Act CAP 470 as the same may be modified,
amended or replaced from time to time;
"TEMA": Tubular Exchanger Manufacturers Association;
"TERM": the period from the Signature Date until expiry of this Agreement in
accordance with Clause 2.2 or earlier termination;
"TRANSMISSION INTERCONNECTOR": the high voltage interconnector specified in
Parts B and C of Schedule 2;
11
"TURNKEY CONSTRUCTION AGREEMENTS": the agreements entered into by the Seller for
the construction of the Early Generation Facility and the Plant;
"UNIT": a binary energy converter, including associated equipment, as comprised
in the Plant or the Early Generation Facility as specified in Part A of Schedule
2;
"UNITED STATES DOLLARS" OR US$": the lawful currency of the United States of
America for the time being and from time to time;
"UNIT COMMERCIAL OPERATION TESTS": the tests to be carried out on each of the
Units as specified in paragraph 2 of Part A of Schedule 4;
"UNIT TESTS": the tests to be carried on each of the Units as specified in
paragraph 1 of Part A of Schedule 4 and the Unit Commercial Operation Tests;
"VOLT": the unit of electrical potential as defined in the International
Standards Organisation standard ISO 1000:1992 Specification for SI Units and
Recommendations for Use of Their Multiples and of Certain Other Units;
"▇▇▇▇▇": the unit of electrical power defined as one (1) joule per second as
defined in International Standards Organisation standard ISO 1000:1992
Specification for SI Units and Recommendations for Use of Their Multiples and of
Certain Other Units;
"WATT HOURS": three thousand six hundred (3600) joules as defined in
International Standards Organisation standard ISO 1000:1992 Specification for SI
Units and Recommendations for Use of Their Multiples and of Certain Other Units;
"WEEK": a period of seven (7) days beginning on a Monday;
1.2 INTERPRETATION: In this Agreement, unless the context otherwise
requires:
(a) reference to a business day is a reference to any day which is not
a Saturday, Sunday or recognised public holiday in Kenya;
(b) reference to a day or a month is a reference to a calendar day or
calendar month;
(c) references to Clauses, Schedules, Paragraphs and Figures are
references to clauses, schedules, paragraphs and figures of and to
this Agreement;
(d) words in the singular shall be interpreted as referring to the
plural and vice versa, and words denoting natural persons shall be
interpreted as referring to corporations and any other legal
entities and vice versa;
(e) a requirement that a payment to be made on a day which is not a
business day shall be construed as a requirement that the payment
be made on the next business day;
12
(f) in the event of a conflict between the Clauses and the Schedules,
the Clauses shall prevail save for Schedule 10 which Schedule shall
prevail;
(g) the term "including" shall be construed without limitation;
(h) headings are for convenience only and shall not affect the
construction of the Agreement;
CLAUSE 2: SCOPE AND DURATION
2.1 SCOPE: The Seller shall:
(i) perform its obligations contained in the Appraisal Programme;
(ii) conduct the Geothermal Reservoir Development;
(iii) design, procure, construct, finance, test, and commission the
Transmission Interconnector;
(iv) design, procure, construct, finance, test, commission, operate and
maintain the Early Generation Facility and the Plant;
(v) seek to make available the Contracted Early Generation Capacity
and the Contracted Plant Capacity in compliance with the Operating
Characteristics;
(vi) sell the Net Electrical Output to KPLC in accordance with and
subject to the terms and conditions of this Agreement.
The Parties hereby acknowledge that, as of the date hereof, all of the
obligations, requirements and arrangements under Sub clauses (i) and
(ii) above have been satisfied in full.
KPLC shall purchase and pay for Available Early Generation Capacity and
Available Plant Capacity and Net Electrical Output, in accordance with
and subject to the terms and conditions of this Agreement.
2.2 TERM OF AGREEMENT: This Agreement shall come into force on the Signature
Date and shall continue in force until the expiry of a period of twenty
(20) years unless earlier terminated in accordance with its terms
provided that:
2.2.1 the period of twenty (20) years shall commence on the Full
Commercial Operation Date where the Seller constructs, in
accordance with Clause 5, a Plant with a Contracted Plant Capacity
greater than the Contracted Early Generation Capacity; or
2.2.2 the period of twenty (20) years shall be deemed to have commenced
at the Early Generation Commercial Operation Date where following
the delivery of a Notice of Limited Reservoir Capacity the Parties
agree or an Expert determines that the Reservoir cannot support a
Contracted Plant Capacity greater than the Contracted Early
Generation Capacity save that if KPLC is
13
required by the Seller to pay damages pursuant to Clause 7.13, the
period of twenty (20) years shall commence from the date on which
KPLC begins to pay such damages.
2.3 EXTENSION: The Term may be extended, subject to agreement in writing by
the Parties to such extension at least twelve (12) months prior to its
expiry, and on such terms as the Parties shall agree.
2.4 REGULATORY APPROVALS: The Parties acknowledge that the original Power
Purchase Agreement dated 5 November 1998, the First Supplemental
Agreement dated 21 July 2000, the Second Supplement Agreement dated 17
April 2003, and this Amended and Restated Power Purchase Agreement were
each approved by the Electricity Regulatory Board in accordance with the
legal requirements, on diverse dates, as per the approvals attached
hereto as Schedule 11.
CLAUSE 3: CONDITIONS PRECEDENT AND SECURITY
3.1 CONDITIONS: Except for the Parties' respective obligations in Clauses
3.2, 14.3 and 16.7 or as otherwise provided herein, the Parties'
obligations hereunder shall commence on the date (the "Effective Date")
on which the last of the conditions in Parts A and B of Schedule 6 have
been satisfied in accordance with Clause 3.2.
3.2 SELLER'S CONDITIONS: The Seller shall use all reasonable endeavours to
satisfy the conditions in Part A of Schedule 6 and to comply with the
condition in Part B of Schedule 6 by the Target Effective Date and KPLC
shall use all reasonable endeavours to assist the Seller in obtaining
the Authorisations specified in paragraph (ii) of Part A of Schedule 6,
provided that:
3.2.1 if the Seller fails to achieve the Target Effective Date the
Seller shall continue to use all reasonable endeavours to satisfy
the conditions in Part A of Schedule 6 and to comply with the
condition in Part B of Schedule 6 by the Long Stop Effective Date.
3.2.2 the Seller shall diligently attempt to obtain all Authorisations
which diligence shall include:
(i) full and timely compliance with all procedural requirements
relating to the issue of such Authorisation, and with all
Legal Requirements which relate to the activities of the
Seller within the Republic of Kenya; and
(ii) pursuing all reasonably available procedures for appealing
against or challenging the grounds upon which such
Authorisation is not issued; and
3.2.3 the Seller shall use all reasonable endeavours to enter into the
Site Agreement.
3.3 NON-SATISFACTION: If any of the conditions referred to in Part A of
Schedule 6 has not been satisfied, or the condition referred to in Part
B of Schedule 6 has not been complied with, by the Long Stop Effective
Date other than by reason of a breach by
14
the Seller of its obligations under Clause 3.2 then either Party may
terminate this Agreement.
3.4 NON-SATISFACTION INVOLVING A BREACH: If any of the conditions referred
to in Par A of Schedule 6 has not been satisfied by the Long Stop
Effective Date or any of the conditions referred to in Part B of
Schedule 6 has not been complied with by reason of a breach by the
Seller of its obligations under Clause 3.2 then KPLC may terminate this
Agreement.
3.5 BID SECURITY:
(a) On the Signature Date, the Seller shall provide to KPLC the Bid
Security. The Bid Security shall be effective from the Signature
Date to the earlier of the date on which the Seller provides to
KPLC the Construction Bond and the date on which the Parties agree
or an Expert determines, in accordance with Clause 5, that the
Reservoir cannot support a Plant with a Contracted Plant Capacity
of at least twenty-eight (28) MW.
(b) If the Effective Date does not occur on or before the Long Stop
Effective Date:
(i) due to a failure under Clause 3.2 caused by the Seller not
diligently attempting to obtain such Authorisation; or
(ii) due to a failure by the Seller to use reasonable endeavours by
the Long Stop Effective Date to satisfy the Conditions
Precedent in Part A of Schedule 6,
then KPLC may take all steps necessary to obtain payment of the
full amount of the Bid Security.
(c) If the Seller:
(i) has not commenced the Appraisal Works by the Long Stop
Appraisal Works Start Date; or
(ii) has failed to achieve the Early Generation Commercial
Operation Date by the Early Generation Long Stop Commercial
Operation Date; or
(iii) has failed to provide KPLC with the Construction Bond within
twenty-eight (28) days of the Parties having agreed or an
Expert having determined, in accordance with Clause 5, that
the Reservoir can support a Plant with a Contracted Capacity
of at least twenty-eight (28) MW,
then KPLC may take all steps necessary to obtain payment of the
full amount of the Bid Security.
(d) If KPLC does not claim payment of the full amount of the Bid
Security pursuant to Clauses 3.4(b) and 4.5(c), the Bid Security
will be returned by KPLC to the Seller on the later of the date on
which the Seller provides to
15
KPLC the Construction Bond and the date the Parties agree or an
Expert determines, in accordance with Clause 5, that the Reservoir
cannot support a Plant with a Contracted Plant Capacity of at least
twenty-eight (28) MW.
3.6 SATISFACTION OF REQUIREMENTS
The Parties hereby acknowledge that, as of the date hereof, all of the
obligations, requirements and arrangements under Clauses 3.1 though 3.5
above have been satisfied in full.
3.7 CONSTRUCTION BOND
(a) Contemporaneous with the issuance of the initial Letter of Credit
(as defined in the Olkaria III Project Security Agreement) to the
Seller, the Seller shall provide to KPLC the Construction Bond.
(b) Unless payment thereunder is earlier demanded by KPLC, the
Construction Bond shall continue in force until the issue by the
independent engineer of a certificate under Clause 7.10 in which
event the Construction Bond shall lapse and shall be returned to
the Seller and KPLC shall make no demand thereon.
(c) If the Seller fails to achieve the Full Commercial Operation Date
by the Long Stop Full Commercial Operation Date then KPLC may take
all steps necessary to obtain payment of the full amount of the
Construction Bond.
(d) In the event that the Seller does not provide to KPLC the
Construction Bond pursuant to Clause 3.7(a), KPLC shall:
(i) Be entitled to withhold the monthly Capacity Payments due to
the Seller equal to a sum of seven hundred and fifty thousand
United States Dollars (US$750,000) ("Construction Security");
(ii) Deposit the Construction Security in an interest bearing
account at a bank agreed between the Parties acting reasonably
where the Construction Security shall be held until either the
issue by the independent engineer of a certificate under
Clause 7.10 in which even the Construction Security shall be
returned with any interest which has accrued on that account
to the Seller, or if the Seller fails to achieve the Full
Commercial Operation Date by the Long Stop Full Commercial
Operation Date KPLC shall be entitled to retain the
Construction Security net of all interest received by KPLC.
16
CLAUSE 4: SITE
4.1 SITE AGREEMENT: Prior to the Effective Date the Seller shall enter into
the Site Agreement.
4.2 LAND OWNED BY GOK: Pursuant to the Site Agreement, the Seller shall
procure from the Governmental Authority an interest in or over the land
owned by the Governmental Authority within the Licence Area as is
necessary for the Seller to meet its obligations under this Agreement
including the construction of the Early Generation Facility and the
Plant and the conduct of the Appraisal Works.
4.3 LAND NOT OWNED BY GOK: In the event that the Seller requires an interest
in or over land not owned by the Governmental Authority within the
Licence Area, the Seller shall first diligently attempt to procure such
interest from the owner of the land. For the purposes of this Clause
4.3, "diligently" shall include pursuing all reasonably available
procedures for obtaining such interest, including the offer of a rent or
purchase price which a person carrying out the Seller's activities would
reasonably expect to pay for such an interest. If the Seller can
demonstrate to GOK that such interest cannot be so procured within one
hundred and twenty (120) days, the Seller shall pursuant to the Site
Agreement require GOK to acquire such land for the Seller at the
Seller's cost. The Seller shall forthwith procure from the owner of the
land an interest in or over the land as is necessary for it to meet its
obligations under this Agreement.
4.4 SELLER'S OBLIGATIONS: The Seller shall perform is obligations under and
observe all the terms of all agreements entered into between the Seller
and GOK or the Seller and other owners of land for the purposes of this
Clause 4 (collectively referred to as "Land Agreements"). The Seller
shall not:
(i) terminate or permit the termination of the Land Agreements;
(ii) in any material respect depart from, or waive or fail to enforce
any rights it may have under the Land Agreements;
(iii) enter into any agreement, document or arrangement which would
materially affect the interpretation or application of the Land
Agreements
unless the relevant document or proposed course of action has been
notified in writing to KPLC and there has been no objection by KPLC. For
the purposes of this Clause 4, the failure by the Seller to enter into a
Land Agreement or the termination of a Land Agreement shall not
constitute Force Majeure.
4.5 SATISFACTION OF REQUIREMENTS:
The Parties hereby acknowledge that, as of the date hereof, all of the
obligations, requirements and arrangements under Clauses 4.1 through 4.3
above have been satisfied in full.
17
CLAUSE 5: GEOTHERMAL RESERVOIR APPRAISAL AND DEVELOPMENT
5.1 THE SELLER'S OBLIGATION: The Seller shall carry out the Appraisal Works
in accordance with the Appraisal Programme and Prudent Operating
Practice.
5.2 MONITORING: KPLC shall be entitled at its own cost to monitor the
progress of the Appraisal Works and the Seller will provide such access,
information and assistance to KPLC as KPLC reasonably requires for it to
carry out such function including without limitation providing
reasonable notice of the spudding of ▇▇▇▇▇, copies of geo-scientific and
well log data (and interpretative work in relation thereto).
5.3 CONSTRUCTION PROGRAMME: The Seller may, before the end of the Appraisal
Period, in the light of the results of the Appraisal Works provide to
KPLC a revised Construction Programme. Any revised Construction
Programme must provide for the Full Commercial Operation Date to occur
on or before the Required Full Commercial Operation Date.
5.4 CONTRACTED PLANT CAPACITY: The Seller may, in the light of the results
of the Appraisal Works, at any time before the end of the Appraisal
Period, by notice to KPLC increase the Contracted Plant Capacity to an
amount, not exceeding one hundred (100) MW or decrease the Contracted
Plant Capacity to an amount, not less than twenty-eight (28) MW, as can,
subject to the installation of necessary Steam Field Facilities, be
supported by the Reservoir on the basis that:
(a) the Plant is operated at ninety-two per cent (92%) of the proposed
revised Contracted Plant Capacity throughout the Term; and
(b) at any time the Reservoir can sustain a continuous steam flow of at
least one hundred and twenty per cent (120%) of the steam flow
required for the Plant to operate continuously, subject to Planned
Maintenance, at one hundred per cent (100%) of the revised
Contracted Plant Capacity; and
(c) the steam flow required by Olkaria I to generate forty-five (45) MW
and the steam flow required by Olkaria II to generate sixty-four
(64) MW will not be significantly affected.
The Seller's notice under this Clause 5.4 shall be accompanied by a
detailed report which provides the Seller's justification for the
increased Contracted Plant Capacity and contains all relevant supporting
evidence and data.
5.4A EXPANSIONS OF OLKARIA I AND OLKARIA II: KPLC shall not purchase more
than forty-five (45) MW from Olkaria I or more than sixty-four (64) MW
from Olkaria II if the steam flow for the Plant would be materially
affected. KPLC shall notify the Seller if it wishes to purchase more
than forty-five (45) MW from Olkaria I or more than sixty-four (64) MW
from Olkaria II and shall use reasonable endeavours to procure for the
Seller a detailed report and relevant supporting evidence and data as to
the steam flow and whether it would be materially affected. In the event
of a dispute the matter may be referred by either Party to an Expert who
shall determine whether the steam flow for the Plant would be materially
affected.
18
5.4B CO-ORDINATING COMMITTEE: The Parties acknowledge that it is in their
interests to share information regarding the geothermal resource at
Olkaria and recognising this interest the Parties shall participate in a
co-ordinating committee to facilitate the exchange of information.
5.5 DISPUTE OVER REVISED CONTRACTED PLANT CAPACITY: If KPLC disputes the
proposed revised Contracted Plant Capacity notified by the Seller
pursuant to Clause 5.4 it may notify the Seller within twenty-eight (28)
days of the Seller's notice of such dispute and thereafter the matter
may be referred by either Party to an Expert who shall determine whether
the proposed revised Contracted Plant Capacity can be supported on the
basis specified in Clause 5.4. In the event that the matter is referred
to an Expert, the Required Full Commercial Operation Date and the Long
Stop Full Commercial Operation Date shall be extended by the period
during which the Expert is making his determination.
5.6 EFFECTIVE DATE OF CHANGE: A change in the Contracted Plant Capacity
shall take effect after the expiry of twenty-eight (28) days following
the Seller's notice under Clause 5.4 provided that KPLC has not served a
notice to the Seller pursuant to Clause 5.5. If KPLC so serves a notice
a change in the Contracted Plant Capacity shall take effect from the
date of the Expert's determination provided that the Expert determines
that the Seller's proposed revised Contracted Plant Capacity can be
supported as aforesaid.
5.7 LIMITED RESERVOIR CAPACITY: The Seller may, at any time after completion
of the Appraisal Programme and before the end of the Appraisal Period,
serve a notice of limited reservoir capacity ("Notice of Limited
Reservoir Capacity") on KPLC if the Seller reasonably believes, in the
light of the results of the Appraisal Works, that the Reservoir cannot,
on the basis of the assumptions referred to in Clause 5.4, support a
Contracted Plant Capacity of at least twenty-eight (28) MW throughout
the Term. The Seller's notice under this Clause 5.7 shall be accompanied
by a detailed report which provides the Seller's justification for its
belief that the Reservoir cannot support a Contracted Plant Capacity of
at least twenty-eight (28) MW and contains all relevant supporting
evidence and data.
5.8 DISPUTE OVER NOTICE OF LIMITED RESERVOIR CAPACITY: KPLC may within 2
months of receiving a notice from the Seller under Clause 5.7 serve a
notice on the Seller if it disputes the Notice of Limited Reservoir
Capacity, in which event the matter shall be referred to an Expert who
shall determine the Contracted Plant Capacity which can be supported by
the Reservoir throughout the Term. In the event that the matter is
referred to an Expert, the Required Full Commercial Operation Date and
the Long Stop Full Commercial Operation Date shall be extended by the
period during which the Expert is making his determination.
5.9 FAILURE TO AGREE: If KPLC does not serve a notice under Clause 5.8 or,
following such a notice, the Expert determines that the Reservoir cannot
support a Contracted Plant Capacity of at least twenty-eight (28) MW
throughout the Term, the Parties shall meet and discuss whether they can
agree terms for the construction of a Plant with a Contracted Plant
Capacity greater than the Contracted Early Generation Capacity but less
than twenty-eight (28) MW. If the Parties have not reached agreement by
the later of six (6) months after the service of the Seller's notice
under
19
Clause 5.7 and two (2) months after the date of the Expert's
determination, the Seller shall continue to operate the Early Generation
Facility and KPLC shall continue to meet its payment and other
obligations in accordance with this Agreement.
5.10 GEOTHERMAL RESERVOIR DEVELOPMENT I: The Seller shall, in accordance with
Prudent Operating Practice, install, maintain and operate such Steam
Field Facilities as are necessary to ensure that at any time, prior to
the Early Generation Cessation Date or throughout the Term (as the case
may be), the Reservoir can sustain a continuous steam flow of at least
one hundred and twenty per cent (120%) of the steam required for the
Early Generation Facility to operated continuously subject to Planned
Maintenance, at one hundred per cent (100%) of the Contracted Early
Generation Capacity.
5.10A GEOTHERMAL RESERVOIR DEVELOPMENT II: The Seller shall, in accordance
with Prudent Operating Practice, install, maintain and operate such
Steam Field Facilities as are necessary to ensure that at any time,
throughout the Term the Reservoir can sustain a continuous steam flow of
at least one hundred and twenty per cent (120%) of the steam required
for the Plant to operated continuously subject to Planned Maintenance,
at one hundred per cent (100%) of the Contracted Plant Capacity provided
that if the Reservoir cannot sustain such steam flow, the Seller shall
forthwith notify KPLC and the Parties shall meet in good faith to agree
new criteria of the steam flow required and in the absence of such
agreement, the matter shall be referred to an Expert for determination.
5.11 STEAMFIELD APPRAISAL RECORDS: Any notice given by the Seller under
Clause 5.4 or Clause 5.7 shall be accompanied by all records relating to
the Appraisal Works.
5.12 SATISFACTION OF REQUIREMENTS:
The Parties hereby acknowledge that, as of the date hereof, all of the
obligations, requirements and arrangements under Clauses 5.1 through 5.9
and under Clause 5.11 above have been satisfied in full, and the
Contracted Plant Capacity was determined pursuant to the Appraisal Works
and the Appraisal Programme at 48 MW.
CLAUSE 6: CONSTRUCTION
6.1 SELLER'S RESPONSIBILITY: The Seller shall design, furnish, construct and
install in accordance with the Construction Programme:
(a) the Early Generation Facility and the Plant so as to comply in all
material respects with the Functional Specification, the System
Characteristics and the relevant provisions of Part B of Schedule 2;
and
(b) the Transmission Interconnector so as to comply in all material
respects with the specification for such Transmission Interconnector
in Part B of Schedule 2 and the System Characteristics.
6.1A EARLY GENERATION CESSATION DATE: Prior to commencement of the Plant
Commercial Operations Test, the Seller shall notify KPLC of a date on
which the Early Generation Facility shall cease to be operated at the
Early Generation Site ("Early Generation Cessation Date"). From the
Early Generation Cessation Date, the Seller
20
shall keep KPLC informed of the Seller's progress in installing the
Early Generation Facility at the Site. The Parties acknowledge that the
Seller shall be unable to deliver electricity to KPLC for the period
commencing from the Early Generation Cessation Date to the date of
commencement of the Plant Commercial Operations Tests, Seller shall have
no obligation to produce energy or make capacity available during this
period, and KPLC shall not be required to make any payments to the
Seller in respect to this period.
6.2 KPLC'S RESPONSIBILITY: KPLC shall design, furnish, construct and install
KPLC's Connection Facilities in accordance with the Construction
Programme and so as to comply in all material respects with the
specification for such facilities as specified in Part B of Schedule 2.
6.3 INFORMATION: Each Party shall keep the other Party informed of the
progress of the design, furnishing, construction and installation of the
facilities to be installed by it pursuant to Clause 6.1 or 6.2, and
every months shall provide a written progress report in respect thereof.
6.4 LOCAL CONTRACTS: The Seller shall, where possible, award contracts to
contractors with existing operations in Kenya and suppliers of materials
and services while existing operations in Kenya provided that the
quality, delivery times, costs, reliability and other terms are
comparable to those offered by foreign contractors and/or suppliers.
6.5 MONITOR PROGRESS: The Seller shall:
(a) ensure that KPLC and any representative appointed by KPLC are
afforded reasonable access to the Early Generation Site and the Site
upon giving the Seller reasonable notice provided that such access
does not materially interfere with the construction works or expose
any person on the Early Generation Site or the Site to any danger;
(b) make available for inspection at the Early Generation Site and the
Site copies of all plans and designs other than any proprietary
information of the Seller or any sub-contractor in relation to the
construction or any part thereof; and
(c) within six months of the Early Generation Commercial Operation Date
and the Full Commercial Operation Date, supply KPLC with one set of
reproducible copies and five sets of white print copies (or
equivalent) of all "as built" plans and designs required for the
operation and maintenance of the Early Generation Facility and the
Plant.
6.6 DISCLAIMER: The Seller:
(a) accepts that any engineering review or inspection conducted by KPLC
pursuant to Clause 6.5 is solely for its own information and
accordingly by conducting such review or inspection KPLC makes no
representation as to the engineering soundness of the Early
Generation Facility and the Plant;
21
(b) shall in no way represent to any third party that, as a result of
any review or inspection by KPLC, KPLC is responsible for the
engineering soundness of the Early Generation Facility and the
Plant; and
(c) shall, subject to the other provisions of this Agreement, be solely
responsible for the economic and technical feasibility, operational
capacity and reliability of the Early Generation Facility and the
Plant.
6.7 FAILURE TO ACHIEVE FULL COMMERCIAL OPERATION DATE BY REQUIRED FULL
COMMERCIAL OPERATION DATE: If the Full Commercial Operation Date has not
occurred by the Required Full Commercial Operation Date (otherwise than
due to Force Majeure of default by KPLC) then:
(a) for each day occurring after the date which is 14 (fourteen) days
after the Required Full Commercial Operation Date and before the
Full Commercial Operation Date the Seller shall pay monthly, in
arrears, to KPLC the Daily Liquidated Damages Sum up to a total
aggregate sum of three million United States Dollars (US$3,000,000);
and
(b) the Seller shall have no further liability to KPLC in respect of
such delay and payment by the Seller to KPLC under this Clause 6.7
shall constitute KPLC's sole and exclusive remedy for the Seller's
failure to achieve the Required Full Commercial Operation Date.
6.8 LONG STOP DATES: If, other than by reason of Force Majeure or default by
KPLC:
(a) the Seller has not commenced the Appraisal Works by the Long Stop
Appraisal Works Start Date; or
(b) the Seller failed to achieve the Early Generation Commercial
Operation Date by the Early Generation Long Stop Commercial
Operation Date; or
(c) where, pursuant to the results of the Appraisal Works under Clause
5, it has been determined that the Reservoir can support a
Contracted Plant Capacity of at least twenty-eight (28) MW, the
Seller has not commenced construction of the Plant by the Long Stop
Construction Date; or
(d) where, pursuant to the results of the Appraisal Works under Clause
5, it has been determined that the Reservoir can support a
Contracted Plant Capacity of at least twenty-eight (28) MW, the Full
Commercial Operation Date has not occurred by the Long Stop Full
Commercial Operation Date,
KPLC may terminate this Agreement by notice to the Seller within two (2)
months of the occurrence of the relevant Long Stop Date. Such
termination shall be without prejudice to any rights accrued due to
either party at the date of termination.
6.9 SATISFACTION OF REQUIREMENT: The Parties hereby acknowledge that as of
the date hereof, all of the obligations, requirements and arrangements
under Clauses 6.1(a), 6.3, 6.5, 6.8(a), 6.8(b) and 6.8(c) with respect
to the Appraisal Works, the Early
22
Generation Facility, and the commencement of construction of the Plant
have been satisfied in full.
CLAUSE 7: COMMISSIONING AND TESTING
7.1 THE SELLER'S OBLIGATIONS: The Seller shall, subject to Clause 7.2, test
and Commission the Early Generation Facility and the Plant in accordance
with the Commissioning and testing procedures (including test tolerances
and criteria) set out in Part A of Schedule 4 and the further procedures
agreed or determined pursuant to Clause 7.5 and 7.5A and in accordance
with the Prudent Operating Practice.
7.2 TRANSMISSION INTERCONNECTOR COMMISSIONING AND TESTING: The Seller shall
test and Commission the Transmission Interconnector and other facilities
specified in Part B of Schedule 2 in accordance with the Commissioning
and testing procedures (including test tolerances and criteria) set out
in Part A of Schedule 4 and the further procedures agreed or determined
pursuant to Clause 7.5 and 7.5A and in accordance with the Prudent
Operating Practice. The Seller shall before Commissioning of the Plant
commences procure that the certificate of an independent engineer,
approved by KPLC, is issued, addressed to KPLC and the Seller,
certifying that the testing of the Transmission Interconnector has been
satisfactorily completed and that it is available for commercial
operation.
7.3 NOTIFICATIONS: The Seller will give KPLC not less than thirty (30) days'
notice of the date of commencement of the respective Commissioning of
the Transmission Interconnector, the Early Generation Facility and the
Plant and not less than fifteen (15) days' notice of the date of the
respective testing (except for routine construction tests) of the
Transmission Interconnector, the Early Generation Facility and the
Plant, provided that the Seller may postpone any such date by giving
KPLC not less than the seven (7) days notice of the postponed date.
7.4 KPLC ATTENDANCE: KPLC shall have the right to attend each occasion on
which a test of the Transmission Interconnector, the Early Generation
Facility and the Plant is being conducted, and to witness the test, and
to receive within fifteen (15) days after the test a copy of the test
reports with shall be prepared by the Seller.
7.5 DETAILED PROCEDURES I: The Parties shall, not later than ninety (90)
days before the Early Generation Commissioning Date, agree (or failing
such agreement an Expert shall determine) detailed procedures consistent
with best international practice for testing and Commissioning the Early
Generation Facility in accordance with, and consistent with, Part A of
Schedule 4.
7.5A DETAILED PROCEDURES II: The Parties shall, not later than ninety (90)
days before the Plant Commissioning Date, agree (or failing such
agreement an Expert shall determine) detailed procedures consistent with
best international practice for testing and Commissioning the
Transmission Interconnector and the Plant (and Units) in accordance
with, and consistent with Schedules 2 and 4.
7.6 KPLC'S TRANSMISSION INTERCONNECTOR AND KPLC'S CONNECTION FACILITIES:
KPLC shall complete the installation, testing and Commissioning of
KPLC's Transmission Interconnector no later than sixteen (16) months
after the Effective Date. KPLC shall
23
complete the installation, testing and Commissioning of KPLC Connection
Facilities no later than seventeen (17) months and two weeks after the
Signature Date.
7.7 KPLC COOPERATION: KPLC will cooperate with the Seller so as to enable
the Seller to Commission and test the Transmission Interconnector and
each Unit in accordance with this Clause 7 and in particular will
authorise connection to KPLC's System and despatch the Unit to the
extent reasonably required by the Seller for such purpose and in
accordance with the procedures in Part A of Schedule 4 and agreed or
determined under Clauses 7.5 and 7.5A.
7.8 RETESTING: Where any test (including a test arranged under this Clause)
of the Transmission Interconnector or of a Unit not completed
satisfactorily in accordance with Schedule 4 the Seller may arrange a
further test by giving KPLC not less than seventy-two (72) hours notice
and such test shall be conducted by the Seller in accordance with the
foregoing provisions of this Clause.
7.9 EARLY GENERATION COMMERCIAL OPERATIONS TESTS: Following completion of
the Unit Commercial Operations Tests of the Early Generation Facility,
the Seller shall conduct the Early Generation Commercial Operations
Tests. Upon satisfactory completion of the Early Generation Facility
Operations Tests, the Seller shall procure that the certificate of an
independent engineer, approved by KPLC, is issued, addressed to KPLC and
the Seller, certifying that the Early Generation Facility's testing has
been so completed and that the Early Generation Facility is available
for commercial operation. The Early Generation Commercial Operation Date
shall be the date occurring immediately after the day on which the Early
Generation Facility has passed the Early Generation Commercial
Operations Tests.
7.10 PLANT COMMERCIAL OPERATIONS TESTS: Following completion of the Unit
Commercial Operations Tests, conducted after the reinstallation of the
Early Generation Facility Units at the Site (if necessary), the Seller
shall conduct the Plant Commercial Operations Tests. Upon satisfactory
completion of the Plant Commercial Operations Tests, the Seller shall
procure that the certificate of an independent engineer, approved by
KPLC, is issued, addressed to KPLC and the Seller, certifying that the
Plant's testing has been so completed and that the Plant is available
for full commercial operation. The Seller shall upon issue of the
certificate notify KPLC of a date (the "Full Commercial Operation Date")
being a date no later than twenty-one (21) days after the date of the
notice. The Seller shall not notify KPLC of the Full Commercial
Operation Date until such time as the Early Generation Facility has been
reinstalled and the Plant has passed the Plant Commercial Operations
Tests.
7.11 PAYMENT DURING EARLY GENERATION FACILITY TESTING: KPLC shall pay Energy
Charges to the Seller in accordance with Part A of Schedule 5 for all
Net Electrical Output supplied by the Early Generation Facility after
the Early Generation Commissioning Date and prior to the Early
Generation Commercial Operation Date.
7.11A PAYMENT DURING PLANT TESTING: KPLC shall pay Energy Charges to the
Seller in accordance with Part B of Schedule 5 for all Net Electrical
Output supplied by the Plant prior to the Full Commercial Operation
Date.
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7.12 TRANSFER OF TRANSMISSION INTERCONNECTOR: Upon the issue of the
certificate of the independent engineer referred to in Clause 7.2 the
Seller shall transfer to KPLC all right, title and interest in the
Transmission Interconnector, all technical drawings, data and material
related to it and all intellectual property rights (whether such rights
be registered, unregistered or registrable) necessary for KPLC to enjoy
free and unencumbered use of it, free of all charges and encumbrances
together with the benefit of any designers' and manufacturers'
warranties.
7.13 KPLC FAILURE TO COMPLETE KPLC'S CONNECTION FACILITIES OR KPLC'S
TRANSMISSION INTERCONNECTOR: In the event that the Seller is unable to
undertake the Commissioning and/or testing of the Plant solely due to a
failure by KPLC to complete its facilities by the Required Early
Generation Commercial Operation Date or the Required Full Commercial
Operation Date KPLC shall pay to the Seller monthly (and pro-rated for
any proportion of the month), in arrears, an amount equal to the
Capacity Payment based on the Contracted Early Generation Capacity or
Contracted Plant Capacity (as the case may be).
7.14 SELLER'S FAILURE TO COMPLETE THE TRANSMISSION INTERCONNECTOR OR THE
INTERCONNECTION OF THE EARLY GENERATION FACILITY: For the avoidance of
doubt, in the event that the Seller does not undertake the Commissioning
and/or testing of one or more Units due to its failure to complete the
connection to the Early Generation Facility or the Transmission
Interconnector in accordance with KPLC design standards and criteria
KPLC shall not be liable for the payment of the Capacity Payments and
Energy Charges and Clauses 6.7 and 6.8 shall apply until such time as
the Seller has completed the interconnection to the Early Generation
Facility shall not be liable for the payment of the Capacity Payments
and Energy Charges and Clauses 6.7 and 6.8 shall apply until such time
as the Seller has completed the interconnection to the Early Generation
Facility or the Transmission Interconnector (as the case may be).
7.15 SATISFACTION OF REQUIREMENTS:
The Parties hereby acknowledge that as of the date hereof, all of the
obligations, requirements and arrangements under Clauses 7.1, 7.3, 7.4,
7.5, 7.6, 7.7 and 7.9 with respect to the Early Generation Facility,
including the KPLC's Transmission Interconnector, have been satisfied in
full.
CLAUSE 8: OPERATING AND DESPATCH PROCEDURES
8.1 OPERATION: The Seller shall during the Term operate the Early Generation
Facility and Plant in a manner consistent with Prudent Operating
Practice, in compliance with the Despatch Instructions and on the basis
of the System Characteristics.
8.2 NOTIFICATION: In accordance with the Operating and Despatch Procedures
and any procedures agreed or specified by KPLC under Clauses 8.4 and
8.5, the Seller shall keep KPLC informed by regular daily declarations,
together with prompt declarations of any changes, of the Available Early
Generation Capacity and Available Plant Capacity (as the case may be)
and any impairment of the Early Generation Facility's or the Plant's
Operating Characteristics (as the case may be) provided that during
Planned Maintenance of the Early Generation Facility or the Plant, the
Early
25
Generation Facility or the Plant (as the case may be) shall be deemed to
be declared unavailable unless the Seller makes a contrary declaration.
8.3 DESPATCH INSTRUCTIONS: KPLC shall issue Despatch Instructions consistent
with the Functional Specification, including the System Characteristics,
prevailing declarations of Availability and any impairment of Operating
Characteristics and despatch constraints, and in accordance with the
Operating and Despatch Procedures and any procedures agreed under Clause
8.4 and Clause 8.5, and shall seek to ensure that KPLC's System complies
with and does not deviate from the System Characteristics.
8.4 FURTHER PROCEDURES I: The Parties shall not later than the Early
Generation Commissioning Date, agree in respect of the Early Generation
Facility (in accordance with and consistent with the Operating and
Despatch Procedures and all other terms of this Agreement) such further
procedures as shall be necessary in accordance with Prudent Operating
Practice for the despatch of the Early Generation Facility and
operational communications between the Parties. Any further procedures
not agreed by the Parties by the Early Generation Commercial Operation
Date shall be specified by KPLC in accordance with Prudent Operating
Practice.
8.5 FURTHER PROCEDURES II: The Parties shall, not later than the Plant
Commissioning Date agree in respect of the Plant (in accordance with and
consistent with the Operating and Despatch Procedures and all other
terms of this Agreement) such further procedures (if any) as shall be
necessary in accordance with Prudent Operating Practice for the despatch
of the Plant and operational communications between the Parties. Any
further procedures not agreed by the Parties by the Full Commercial
Operation Date shall be specified by KPLC in accordance with Prudent
Operating Practice.
8.6 OVER-GENERATION: In the event that the Seller over a period of four (4)
or more successive Settlement Periods delivers to KPLC electricity in
excess of the Despatch Instructions, KPLC may by notice require the
Seller to comply with Despatch Instructions and if such excess delivery
continues, the Seller shall notwithstanding the provisions of Clause
10.2 not be entitled to receive the Energy Charges in respect of any
excess delivery.
8.7 UNDER-GENERATION: In the event that the Seller having failed to notify
KPLC of a reduction in Declared Capacity delivers to KPLC electricity
over a period of four (4) or more successive Settlement Periods which is
less than the quantity required by the Despatch Instructions
("Under-Generation"), KPLC may by notice require the Seller to remedy
such under-generation within the following two (2) Settlement Periods
(i.e. within one (1) hour) and to comply with the Despatch Instructions.
If the Seller continues such Under-Generation, for subsequent Settlement
Periods in which under-generation is continuing the Seller's Declared
Capacity shall be deemed to equal to twice the Net Electrical Output.
8.8 NOTICE: Any notice given by KPLC under Clauses 8.6 and 8.7 shall be
given in writing and delivered by facsimile to the Seller at the
address, and marked for the attention of the person, specified in
Schedule 8 or such other address or person from time to time designated
by the Seller and such notice shall be deemed to be received
26
upon confirmation of uninterrupted transmission by a transmission report
provided that such notice shall be confirmed by letter sent by hand or
post, but without prejudice to the original facsimile notice.
CLAUSE 9: MAINTENANCE AND REPAIR
9.1 THE SELLER'S OBLIGATION I: The Seller shall maintain and repair the
Plant in accordance with Prudent Operating Practice during the Operating
Period.
9.1A THE SELLER'S OBLIGATIONS II: The Seller shall maintain and repair the
Early Generation Facility in accordance with Prudent Operating Practice
from the Early Generation Commissioning Date for the Term or until the
Early Generation Cessation Date or the Full Commercial Operation Date,
whichever is the earlier, unless this Agreement is terminated earlier.
9.2 PLANNED MAINTENANCE: The Seller shall be entitled to withdraw each Unit
from operation for maintenance and inspection each year for periods not
exceeding those specified in Schedule 3.
9.3 PLANNED MAINTENANCE PROGRAMME: The programme of Planned Maintenance for
each Operating Year shall be established as follows:
(a) the Seller shall not later than ninety (90) days before the start of
each Operating Year submit to KPLC proposed dates for Planned
Maintenance in that year;
(b) KPLC may within thirty (30) days after receiving the Seller's
proposed dates notify the Seller of alternative dates which KPLC
prefers, in which case the Parties shall consult and the Seller
shall use reasonable endeavours to accommodate KPLC's proposal;
(c) not less than thirty (30) days before the start of the relevant
Operating Year the Seller shall issue a final programme (including
dates) for Planned Maintenance in accordance with the agreement
reached by consultation under Clause 9.3(b) provided that where no
agreement was reached then KPLC's alternative dates shall prevail,
to the extent that such alternative dates do not result in the
Seller incurring unreasonable costs;
(d) the scheduled maintenance allowance shall be calculated in
accordance with Part A or Part B of Schedule 3 (as the case may be),
using the Planned Maintenance schedule agreed pursuant to Clauses
9.3(a), (b) and (c).
9.4 CHANGES TO PROGRAMME: The Parties shall cooperate and use their
reasonable endeavours to accommodate any reasonable request by either
Party to reschedule any Planned Maintenance an any Operating Year.
9.5 MAINTENANCE OUTAGES: Without prejudice to Clause 9.1 and subject to
applicable notification requirements under the Operating and Despatch
Procedures, nothing in this Agreement shall oblige the Seller to take a
Unit out of operation at the start of the
27
relevant period specified in the programme for Planned Maintenance nor
prevent the Seller from returning a Unit to operation before the end of
such period.
9.6 OTHER OUTAGES: Nothing in this Agreement shall prevent the Seller from
carrying out maintenance or repair of the Early Generation Facility or
the Plant (and taking a Unit out of operation for this purpose) at times
other than during Planned Maintenance where such maintenance or repair
cannot, in accordance with Prudent Operating Practice, be deferred to
the next scheduled Planned Maintenance or upon the occurrence of any
outage.
9.7 KPLC MAINTENANCE: KPLC shall in accordance with Prudent Operating
Practice maintain and repair KPLC's Connection Facilities, and shall
seek to coordinate the timing of such maintenance or repair with the
Seller's Planned Maintenance.
9.8 REVISION TO CONTRACTED EARLY GENERATION CAPACITY: From the Early
Generation Commercial Operation Date and prior to the Full Commercial
Operation Date and not less than once in every period of twelve (12)
months the Seller shall conduct a Contracted Early Generation Capacity
Test on the Early Generation Facility. Following a Contracted Early
Generation Capacity Test the Seller may revise the Contracted Early
Generation Capacity to accord with the results of such test provided
that the Contracted Early Generation Capacity of the Early Generation
Facility may not be less than the Contracted Early Generation Capacity
at the Signature Date.
9.8A REVISION TO CONTRACTED PLANT CAPACITY: After the Full Commercial
Operation Date and not less than once in every period of twelve (12)
months the Seller shall conduct a Contracted Plant Capacity Test on the
Plant. Following a Contracted Plant Capacity Test the Seller may revise
the Contracted Plant Capacity to accord with the results of such test
provided that the Contracted Plant Capacity may not be less than ninety
per cent (90%) of the Contracted Plant Capacity agreed at the end of the
Appraisal Period, nor greater than one hundred and ten per cent (110%)
of that amount, provided that the Reservoir can sustain the required
steam flow. If the Reservoir cannot sustain such steam flow, the Seller
shall forthwith notify KPLC and the Parties shall meet in good faith to
agree new criteria of the steam flow required and in the absence of such
agreement the matter shall be referred to an Expert for determination.
9.9 ATTENDANCE AT TEST: The Seller shall give KPLC reasonable notice of its
intention to conduct a Contracted Early Generation Capacity Test or
Contracted Plant Capacity Test (as the case may be) and KPLC shall be
entitled to attend or send representatives to witness such test.
9.10 ADDITIONAL TESTS: In addition to the tests provided for in Clauses 9.8
and 9.8A, and subject to the provision of reasonable advance notice, the
Seller may at any time and from time to time conduct a further test and
the provisions of Clauses 9.8, 9.8A and 9.9 shall apply thereto, mutatis
mutandis. KPLC shall have the right to call for a Contracted Early
Generation Capacity Test or a Contracted Plant Capacity Test (as the
case may be) in the case of an Availability Failure which continues for
eight (8) consecutive Settlement Periods. Without prejudice to such
right, KPLC may call for a test no more frequently than one hundred
eighty (180) days from the previous test, and the provisions of Clauses
9.8, 9.8A and 9.9 shall apply thereto, mutatis mutandis.
28
Notwithstanding the provisions of Clauses 9.8, 9.8A, 9.9 and 9.10, the
Seller may, in its sole discretion, repeat, as soon as practicable and
in any event within six (6) hours any test when such test was
unsuccessful due to mechanical or electrical failure of the equipment
provided that the Seller gives notice to KPLC of the repetition of a
Contracted Early Generation Test or Contracted Plant Capacity Test (as
the case may be) before or within fifteen (15) minutes of the conclusion
of the previous test.
9.11 AVAILABILITY FAILURE: If, within twenty-four (24) hours of an
Availability Failure which continues for eight (8) consecutive
Settlement Periods, KPLC calls for a Contracted Early Generation
Capacity Test or Contracted Plant Capacity Test (as the case may be)
pursuant to Clause 9.10 and such test demonstrates that the capacity
available is less than the Contracted Early Generation Capacity Test or
Contracted Plant Capacity (as the case may be) then for the period
beginning from the Settlement Period within which such Availability
Failure occurred and ending when the Available capacity has been agreed
or determined pursuant to the Contracted Early Generation Test or
Contracted Plant Capacity Test (as the case may be), the Contracted
Early Generation Capacity or Contracted Plant Capacity for such period
shall be equal to the average Availability of the Early Generation
Facility or the Plant (as the case may be) achieved in response to
Despatch Instructions for the Settlement Periods in which such
Availability Failure occurred or the capacity demonstrated to be
Available by such test, if greater.
9.12 RESTORATION OF CAPACITY: Notwithstanding the provisions of Clauses 9.8,
9.8A, if in any period of three (3) months the average Contracted Early
Generation Capacity or Contracted Plant Capacity, demonstrated by tests
conducted over that period, is less than sixty per cent (60%) of the
Contracted Early Generation Capacity at the Signature Date or Contracted
Plant Capacity agreed or determined in accordance with Clause 5 (as the
case may be), and provided that the Reservoir can sustain the required
steam flow, the Parties shall forthwith meet and agree a programme to be
implemented by the Seller during the next following six (6) month period
for restoring the Contracted Early Generation Capacity or Contracted
Plant Capacity (as the case may be) to ninety-eight per cent (98%) (in
the five (5) years immediately following the Early Generation Commercial
Operation Date or the Full Commercial Operation Date (as the case may
be)) or otherwise to ninety-five per cent (95%) of the level at which it
was on the Signature Date or agreed or determined in accordance with
Clause 5 (as the case may be). If the Seller fails to so restore the
Contracted Early Generation Capacity or Contracted Plant Capacity during
the said six (6) month period, the Capacity Payments from the end of
such six (6) month period until the date on which the capacity is
restored in accordance with Clause 9.12 shall be multiplied by a factor
of decimal five (0.5), the Parties hereby agreeing that such adjustment
represents a genuine pre-estimate of the cost to KPLC for procuring
alternative generating capacity which the Seller is unable to provide.
9.13 DISPUTES: Any dispute as to the results of a Contracted Early Generation
Capacity Test or Contracted Plant Capacity Test (as the case may be)
shall be referred to an Expert.
29
CLAUSE 10: SALE AND PURCHASE OF ELECTRICITY
10.1 SALE AND PURCHASE I: From the Early Generation Commercial Operation Date
the Seller shall sell and KPLC shall purchase all the Net Electrical
Output of the Early Generation Facility generated in accordance with
Despatch Instructions.
10.1A SALE AND PURCHASE II: From the Full Commercial Operation Date the Seller
shall sell and KPLC shall purchase all the Net Electrical Output of the
Plant supplied in accordance with Despatch Instructions.
10.2 ENERGY CHARGES: KPLC shall pay the Seller Energy Charges ascertained in
accordance with Parts A and B of Schedule 5 in respect of all Net
Electrical Output sold and purchased in accordance with Clauses 10.1 and
10.1A respectively.
10.3 DELIVERY POINT: Electricity sold and purchased under this Agreement
shall be delivered at the Delivery Point and all transmission losses
before the Delivery Point shall be for the Seller's account and all
transmission losses beyond the Delivery Point shall be for KPLC's
account.
10.4 METERED QUANTITIES: The quantities of Net Electrical Output delivered at
the Delivery Point shall be metered and determined in accordance with
the provisions of Clause 12.
10.5 CAPACITY PAYMENTS: KPLC shall in respect of the month in which the Early
Generation Commercial Operation Date occurs and for each month
thereafter during the Term pay the Seller for the Contracted Early
Generation Capacity, and KPLC shall in respect of the month in which the
Full Commercial Operation Date occurs and for each month thereafter
during the Term pay the Seller for the Contracted Plant Capacity (each,
as the case may be, with adjustments reflecting Availability), in
accordance with Part A or B of Schedule 5.
10.6 FURTHER PROVISIONS: The further provisions of Parts A and B of Schedule
5 shall take effect for the purposes of determining the amounts from
time to time payable by KPLC by way of Energy Charges and Capacity
Payments.
10.7 DESPATCH: KPLC intends to despatch the Early Generation Facility or the
Plant (as the case may be) if it is declared Available provided that it
shall have no liability under this Agreement (other than its obligations
to make Capacity Payments) or otherwise if it fails to do so; including
in relation to any Plant Annual Target Output Bonuses foregone by the
Seller as a result.
10.8 TAXES AND DUTIES: If at any time after the Signature Date, there is a
change in the rate of Taxes and Duties which gives rise to an increase
or decrease in the level of costs incurred by the Seller in the design,
construction or operation of the Early Generation Facility or the Plant
or the conduct of the Appraisal Works either Party may within 3 months
of the change occurring by notice to the other seek an adjustment to the
Energy Charges and/or Capacity Payments which will have the effect of
placing the Seller in the same financial position as it would have been
in had the change not occurred. The Parties shall meet and endeavour to
agree to the adjustment and if the Parties shall fail within thirty (30)
days of a notice under this
30
Clause 10.8 to agree upon such adjustment either Party may refer the
matter to an Expert who shall be an internationally recognised public
accounting firm and who shall be free to accept proposals for such
adjustments or make such directions as to the appropriate adjustment as
he shall deem fit.
CLAUSE 11: INVOICING AND PAYMENT
11.1 INVOICE I: The Seller shall with respect to the Early Generation
Facility, within thirty (30) days of the end of each month (beginning
with the month in which the Early Generation Commercial Operation Date
occurs until the Early Generation Cessation Date (if any)) prepare and
issue to KPLC an invoice in respect of the payments due from KPLC for
that month.
11.1A INVOICE II: The Seller shall with respect to the Plant, within thirty
(30) days of the end of each month (beginning with the month in which
the Plant Commissioning Date occurs until the expiry of the Term)
prepare and issue to KPLC an invoice in respect of the payments due from
KPLC for that month.
11.2 CONTENT OF INVOICE: Each invoice prepared by the Seller shall be
substantially in the form set out in Part C of Schedule 5 and shall
contain the information specified in that Part determined on the basis
of relevant quantities metered and recorded in accordance with Clause
12. KPLC shall be entitled, no later than five (5) days after receipt,
to reject any invoice which does not materially conform to Part C of
Schedule 5 or which is not accompanied by all the supporting
documentation agreed by the Parties provided that no later than four (4)
days after receipt of such invoice, KPLC shall notify the Seller of the
information which it requires in accordance with Part C of Schedule 5,
in order to process the invoice and the Seller shall have the right to
furnish such information or documentation as KPLC may reasonably
require. If KPLC so rejects an invoice the Seller shall be deemed not to
have issued or delivered an invoice to KPLC and KPLC shall not be
required to make any payments to the Seller. In such event, the
provisions of this Clause 11.2 shall be repeated until such time as the
Seller issues an invoice which conforms to Part C of Schedule 5 and
which is accompanied by all the supporting documentation agreed by the
Parties.
11.3 PAYMENT DUE DATE: Energy Charges, Capacity Payments and any other
amounts payable by KPLC hereunder shall be due and payable within thirty
(30) days after the date of delivery of the invoice.
11.4 LATE PAYMENT INTEREST: Any amount properly due from KPLC to the Seller
under this Agreement and remaining unpaid after the due date for payment
shall bear interest at the Default Rate from and including the date when
the amount in question was due until but excluding the date when it is
received by the Seller, accruing from day to day and compounded
quarterly.
11.5 DISPUTED PAYMENTS: If any sum or part of any sum shown on an invoice
rendered by the Seller is disputed in good faith by KPLC then the
payment of the undisputed sums or parts shall not be withheld on those
grounds and shall be paid to the Seller when due; and interest at the
Non-Default Rate shall be payable on any disputed sum subsequently
agreed or judged to be due from and including the date when the sum in
question was due until but excluding the date when it is received by the
Seller,
31
accruing from day to day and compounded quarterly. Any disputed payment
will be resolved in accordance with the Good Faith Dispute Procedure.
11.6 TAXES, ETC: Except as otherwise provided, all payments under this
agreement shall be made free and clear from, and without set-off,
deduction or withholding on account of, any form of Taxes and Duties,
save to the extent that KPLC is duly appointed by the Commissioner for
Income Tax as agent for the Seller under section 96 of the Income Tax
Act and makes payments to the Commissioner of Income Tax as agent for
the Seller pursuant to sub-section 96(3) as the same may be re-enacted,
amended, replaced or modified.
11.7 THE SELLER'S ACCOUNT: Payment of any sum payable under this Clause shall
be effected through wire transfer to the account of the Seller at a bank
located outside the Republic of Kenya or such other bank as may be
notified by the Seller to KPLC from time to time provided that such
payment shall be made on a business day and shall be net of all bank
charges payable by KPLC in connection with such transfer.
11.8 CURRENCY FOR PAYMENTS: Unless otherwise agreed by the Parties in
writing, all amounts falling due under this Agreement shall be payable
in United States Dollars and the Seller shall not be obliged to accept
payment in any other currency.
11.9.1 SECURITY: As security for the payment of sums payable by KPLC under
Clause 11 of this Agreement, the Parties have entered into the Olkaria
III Project Security Agreement, pursuant to which KPLC will provide a
letter of Credit. OrPower 4 will meet certain expenses with respect to
the Letter of Credit, all as provided under the Olkaria III Project
Security Agreement. If any such expenses which OrPower 4 is liable to
reimburse are due and owing despite KPLC's written demand to the Seller
for payment of such amounts, KPLC may offset such amounts against
payments owing by KPLC under Clause 11 hereto.
11.9.2 DEEMED PAYMENT: No later than thirty (30) days after the date on which
the Seller becomes entitled to make a demand under the Letter of Credit,
the Seller shall take all steps necessary to make such a demand in
writing of all moneys due and owing to the Seller (and not dispute by
KPLC) under the Letter of Credit. If and to the extent that moneys are
paid to the Seller under the Letter of Credit, the undisputed amounts
due under an invoice which has not been paid in accordance with Clause
11.3 shall be deemed to that extent to have been paid by KPLC to the
Seller on the date of actual payment and on and with effect from such
date he provisions of Clauses 11.4 and 16.2(c) shall cease to apply in
relation to the sums so paid.
11.9.3 FAILURE TO DEMAND: If the Seller fails to take all steps necessary to
demand moneys in writing under the Letter of Credit within the
aforementioned thirty (30) days and to the extent that moneys are
available to the Seller under the Letter of Credit, the provisions of
Clauses 11.4 and 16.2(c) shall not apply following the thirtieth (30th)
day after an invoice becomes due.
CLAUSE 12: METERING
12.1 METERING PARTY'S OBLIGATIONS: Each Party (the "Metering Party") shall
not later than the Early Generation Commissioning Date install (or
procure the installation of) and
32
shall maintain and operate that part of the Metering System for which it
is responsible in accordance with Part D of Schedule 2.
12.2 NON-METERING PARTY'S RIGHTS: With respect to all components of the
Metering System for which the other Party is the Metering Party, each
Party (the "Non-Metering Party") shall have the right to its own
expense:
(a) to inspect such parts of the Metering System upon reasonable
notice;
(b) to attend and witness tests, adjustments and recalibration of such
parts of the Metering System carried out by the Metering Party
pursuant to Part B of Schedule 4; and
(c) to request the testing, adjustment for error and recalibration of
such parts of the Metering System.
12.3 SPECIFICATION, ETC. OF METERING SYSTEM: The specification and required
limits of accuracy of Metering System, and the metering point (the
electrical point at which such Metering System is positioned), shall be
as specified in Part D of Schedule 2, provided that where the metering
point is not specified it shall be located as near as possible to the
Delivery Point.
12.4 DEFECTIVE METERING SYSTEM: Where it is agreed or determined that any
part of the Metering System is defective (including operating outside
the relevant limit of accuracy in Part D of Schedule 2), then such part
of the Metering System shall be repaired, adjusted or replaced at the
cost of the Metering Party.
12.5 METER ERROR: Where in the circumstances referred to in Clause 12.4 it is
necessary to redetermine any quantity measured or recorded by the
defective Metering System the provisions of paragraph 2(b) of Part B
Schedule 4 shall apply.
12.6 METER SEALING: The Metering System shall comply with the specifications
set out in Part D of Schedule 2 and shall be jointly sealed. Such seals
shall be broken only by KPLC personnel. The Seller shall be given at
least twenty-four (24) hours advance notice of the breaking of seals on
the Metering System provided however that no such notice will be
necessary when the breaking of a seal is necessitated by the occurrence
of an Emergency.
12.7 METER TAMPERING: KPLC and the Seller undertake not to tamper or
otherwise interfere with the Metering System in any way with the object
of effect of distorting the quantity measured or recorded by the
Metering System. Where it is established that the Metering System has
been tempered or interfered with, the quantity measured or recorded
shall be determined in accordance with paragraph 2(b) or Part B of
Schedule 4.
12.8 METERING PROCEDURES: The Parties shall adopt and implement the
procedures and arrangements set out in Part B of Schedule 4 for reading,
testing, adjusting and recalibrating the Metering System.
33
12.9 DISPUTES: Any dispute arising under this Clause 12, Part D of Schedule 2
or Part B of Schedule 4 shall be referred to the determination of an
Expert.
12.10 SATISFACTION OF REQUIREMENTS:
The Parties hereby acknowledge that as of the date hereof, all of the
obligations, requirements and arrangements under Clause 12 with
respect to the Metering System of the Early Generation Facility have
been satisfied in full.
CLAUSE 13: INSURANCE
The Seller shall:
(a) take out and maintain in full force and effect such policies of
insurance as are specified in Schedule 9 with reputable insurance
companies approved by KPLC (such approval not to be unreasonably
withheld);
(b) provide to KPLC copies of all policies effected by it and evidence
that the premiums payable thereunder have been paid;
(c) provide access to KPLC or its representatives to its offices to
inspect the original policies;
(d) subject to the Financing Agreements, apply the proceeds of claims
against such policies, relating to damage to the Early Generation
Facility or the Plant (as the case may be) in repairing and
restoring the Early Generation Facility or the Plant (as the case
may be) unless the damage is such as to make the Early Generation
Facility or the Plant a total loss and the Parties deem the Early
Generation Facility or the Plant to be irreparable; and
(e) obtain waivers of rights of subrogation against KPLC.
CLAUSE 14: UNDERTAKINGS AND WARRANTIES OF THE PARTIES
14.1 UNDERTAKINGS OF THE SELLER: The Seller undertakes that:
(a) it shall comply with all applicable Legal Requirements; and
(b) it shall use all reasonable endeavours to keep in force all
Authorisations required to be in the Seller's name for the
operation of the Early Generation Facility and the Plant and any
other of its obligations under this Agreement and that it will
indemnify KPLC against all costs incurred by KPLC in the discharge
of its obligations under Clause 14.3(c) below in accordance with
any specific Seller requests;
(c) the Early Generation Facility and the Plant shall be constructed,
maintained and operated in accordance with the terms of this
Agreement;
(d) it shall issue such number of fully paid shared or other securities
constituting shareholders funds on its balance sheet as shall in
aggregate at the Early Generation Commercial Operation Date and at
the Full Commercial Operation
34
Date amount to not less than twenty-five per cent (25%) of the
total investment made by the Seller for the purposes of this
Agreement as at such date and for the purposes of this Clause
14.1(d), "total investment" shall in respect of the Early
Generation Facility mean a sum equal to seventeen million five
hundred thousand US Dollars (US$17,500,000) and in respect of the
Plant, "total investment" shall mean a sum that shall amount to
not less than one hundred and thirty-three per cent (133%) of the
aggregate sum borrowed by the Seller pursuant to the Financing
Agreements; and
(e) it will use commercially reasonable efforts to carry out its
respective obligations for the Establishment Date by the Target
Establishment Date and to diligently pursue necessary approvals in
a timely fashion.
14.2 REPRESENTATIONS AND WARRANTIES OF THE SELLER: The Seller represents and
warrants that:
(a) the Seller is a limited liability company duly organised and
validly existing under the laws of the Cayman Islands and has all
requisite legal power and authority to execute this Agreement and
to carry out the terms, conditions and provisions hereof;
(b) this Agreement constitutes the valid, legal and binding obligation
of the Seller, enforceable in accordance with the terms hereof
except as the enforceability may be limited by applicable laws
affecting creditors' rights generally;
(c) there are no actions, suits or proceedings pending or, to the
Seller's knowledge, threatened, against or affecting the Seller
before any court or administrative body or arbitral tribunal that
might materially adversely affect the ability of the Seller to meet
and carry out its obligations under this Agreement;
(d) the execution, delivery and performance by the Seller of this
Agreement have been duly authorised by all requisite corporate
action, and will not contravene any provision of, or constitute a
default under, any other agreement or instrument to which it is a
party or by which it or its property may be bound.
14.3 UNDERTAKINGS OF KPLC: KPLC undertakes that it shall:
(a) comply with all applicable Legal Requirements and will keep in
force all Authorisations required for the performance of its
obligations under this Agreement;
(b) assist the Seller in obtaining on a timely basis (as required under
Clause 3, and the Construction Programme) and to assist the Seller
in maintaining until the first anniversary of the Full Commercial
Operation Date (to the extent that KPLC can so do) all
Authorisations required by the Seller;
(c) to the extent there is a Change in Law, use reasonable endeavours
to assist the Seller to obtain all Authorisations necessary for the
continued operation or
35
maintenance of the Plant or for the Geothermal Reservoir
Development in accordance with any specific Seller requests; and
(d) it will use commercially reasonable efforts to carry out its
respective obligations for the Establishment Date by the Target
Establishment Date and to diligently pursue necessary approvals in
a timely fashion.
14.4 REPRESENTATIONS AND WARRANTIES OF KPLC: KPLC represents and warrants
that:
(a) KPLC is a limited liability company duly organised and validly
existing under the laws of Kenya and has all requisite legal power
and authority to execute this Agreement and to carry out the terms,
conditions and provisions hereof;
(b) all legislative, administrative or other governmental action
required to authorise the execution, delivery and performance by
KPLC of this Agreement and the transactions contemplated hereby
have been taken and are in full force and effect;
(c) this Agreement constitutes the valid, legal and binding obligation
of KPLC, enforceable in accordance with the terms hereof except as
the enforceability may be limited by applicable laws affecting
creditors' rights generally;
(d) there are no actions, suits or proceedings pending or, to KPLC's
knowledge, threatened, against or affecting KPLC before any court
or administrative body or arbitral tribunal which might materially
adversely affect the ability of KPLC to meet and carry out its
obligations under this Agreement; and
(e) the execution, delivery and performance by KPLC of this Agreement
have been duly authorised by all requisite corporate action, and
will not contravene any provision of, or constitute a default
under, any other agreement or instrument to which it is a party or
by which it or its proper may be bound.
CLAUSE 15: FORCE MAJEURE
15.1 EVENTS OF FORCE MAJEURE: For the purposes of this Agreement "Force
Majeure" means, subject to Clause 15.2, any event or circumstance which
affects either Party and is not within the reasonable control (directly
or indirectly) of the Party affected, to the extent that such event or
circumstance or its effects cannot be prevented, avoided or removed by
such Party acting in accordance with Prudent Operating Practice. "Force
Majeure" shall (save as is provided in Paragraph 6 of Part A of Schedule
5 and Paragraph 8 of Part B of Schedule 5) include each of the following
events and circumstances to the extent that they satisfy the foregoing
requirements:
(i) any act of war (whether declared or undeclared), invasion, armed
conflict or act of foreign enemy, blockade, embargo, revolution,
riot, insurrection, civil commotion, act of terrorism, or sabotage
provided that any such event occurs within or directly involves
the Republic of Kenya or any other country from which machinery,
equipment and materials for the Early Generation Facility or the
Plant are procured or transported through;
36
(ii) an act of God including but not limited to lightning, fire,
earthquakes, volcanic activity, floods, storms, cyclones,
typhoons, or tornadoes;
(iii) epidemics or plagues;
(iv) explosions or chemical contamination (other than resulting from an
act of war);
(v) labour disputes including strikes, works to rule or go-slows or
lockouts that extend beyond the Plant or are widespread or
nationwide;
(vi) Change in Law.
15.2 EXCLUSIONS FROM FORCE MAJEURE: The following events or circumstances
shall not constitute Force Majeure:
(a) late delivery to the Seller of machinery, equipment, materials,
spare parts or consumables save where such late delivery is itself
due to Force Majeure;
(b) a delay in the performance of any contractor save where such delay
is itself due to Force Majeure;
(c) breakdowns in equipment save where such breakdown is itself due to
Force Majeure;
(d) normal wear and tear or random flaws in materials and equipment;
(e) payment of monies due provided that relief under this Clause 15
shall extend to failure caused by circumstances or events of Force
Majeure affecting all reasonable means of payment;
(f) any failure to perform obligations under this Agreement to the
extent that such failure results from or is caused by insufficient
Steam Field Facilities or by adverse Reservoir conditions,
including insufficiency of reserves, prevailing within the
Geothermal Reservoir (including insufficient capacity in the
Seller's Steam Field Facilities);
(g) a Change in Law in the circumstances described in Clause 10.8.
15.3 EFFECT OF FORCE MAJEURE: If a Party is prevented from or delayed in
performing an obligation hereunder by reason of Force Majeure the
affected Party shall:
(a) be relieved from the consequences of its failure to perform that
obligation;
(b) promptly notify the other Party of the occurrence of the event; and
(c) use all reasonable endeavours to overcome the consequences of the
event.
15.4 CONSTRUCTION FORCE MAJEURE: Where the Seller is as a result of an event
of Force Majeure (including a failure by KPLC to perform any of its
obligations under this
37
Agreement) delayed in or prevented from performing any of its
obligations before the Long Stop Dates (or any of them) the Long Stop
Dates which have not then occurred shall be revised to new dates which
reflect the period of delay resulting from such Force Majeure or failure
provided that no Long Stop Dates may be delayed by more than one hundred
and eighty (180) days in aggregate.
15.5 PAYMENTS DURING FORCE MAJEURE: Save where a specific payment remedy is
available to the Seller under this Agreement, upon the occurrence of any
Force Majeure event after the Early Generation Commercial Operation
Date, then during the Force Majeure event or KPLC failure to perform any
of its obligations under this Agreement, KPLC shall pay to the Seller
Energy Charges for the Net Electrical Output delivered in accordance
with Despatch Instructions during such Force Majeure event or failure
plus a Capacity Payment in accordance with paragraph 8 of Part A of
Schedule 5.
Notwithstanding the above, the payments referred to under this Clause
15.5 shall not be paid during the period of actual construction of the
Plant prior to the achievement of Full Commercial Operation with respect
to the anticipated capacity of the Plant, but shall be paid in full with
respect to the Early Generation Facility.
15.6 FORCE MAJEURE TERMINATION: If an event of Force Majeure continues beyond
a period of two hundred and seventy (270) days, the Parties shall meet
in good faith to consult for a further period of not less than ninety
(90) days to reach a solution acceptable to all Parties. If, at the end
of such ninety (90) day period, no such solution is found, either Party
shall be entitled to terminate this Agreement by giving written notice
of not less than seven (7) days to the other Party.
CLAUSE 16: TERMINATION AND DEFAULT
16.1 THE SELLER'S EVENTS OF DEFAULT: For the purposes of this Agreement an
Event of Default in respect of the Seller shall be:
(a) subject to the provisions of Clause 16.4, any of the following
events:
(i) the wilful and unexcused failure by the Seller to operate the
Early Generation Facility or the Plant in compliance with
Despatch Instructions and in accordance with the provisions of
this Agreement without the written consent of KPLC after the
Early Generation Commercial Operation Date or the Full
Commercial Operation Date (as the case may be);
(ii) the breach by the Seller of any of its material obligations
under this Agreement. However, the Seller's failure either in
the event of Under-Generation under Clause 8.7, Availability
Failure under Clause 9.11, or prolonged failure to achieve the
required Contracted Capacity under Clause 9.12 shall not
constitute a Default in respect of the Seller under this
Clause unless and until the period for restoring the
Contracted Early Generation Capacity or Contracted Plant
Capacity (as the case may be) provided under Clause 9.12 has
expired and restoration of the capacity has not been achieved
as required therein, and provided
38
further that any Seller failure under Clause 14.1(e) shall not
constitute a Default in respect of the Seller;
(b) in relation to the Seller or its assets, the commencement of
bankruptcy, insolvency, winding up, liquidation, or other similar
proceeding, or the appointment of a trustee, liquidator, custodian,
receiver of similar person, unless such proceeding or appointment
is capable of being and is set aside or stayed within sixty (60)
days.
16.2 KPLC DEFAULTS: For the purposes of this Agreement a Default in respect
of KPLC shall be:
(a) subject to the provisions of Clause 16.4, the breach by KPLC of any
of its material obligations under this Agreement other than the
failure to make any payments under this Agreement when due and
payable;
(b) in relation to KPLC or its assets, the commencement of bankruptcy,
insolvency, winding up, liquidation, or other similar proceeding,
or the appointment of a trustee, liquidator, custodian, receiver or
similar person, unless such proceeding or appointment is capable of
being and is set aside or stayed within sixty (60) days; and
(c) any failure to pay any sum of money due and owing for 90 days or
more from the date when such sum was first due and demanded and
which sum is not subject to a bona fide dispute.
16.3 DEFAULTING PARTY, ETC: For the purposes of this Agreement the Seller is
the defaulting Party in relation to the Defaults specified in Clause
16.1 and KPLC is the defaulting Party in relation to the Defaults
specified in Clause 16.2, and (in each case) the other Party is the
non-defaulting Party.
16.4 REMEDIAL PROCEDURES: Upon the occurrence of any Default, the
non-defaulting party may give notice to the defaulting Party of the
occurrence of such Default and (in the case of a Default capable of
remedy) requiring the remedy thereof; and if after such notice has been
given:
(a) the defaulting Party does not, within thirty (30) days after
receipt of the non-defaulting Party's notice:
(i) where such Default is capable of remedy within such thirty
(30) day period, remedy the default; or
(ii) where such Default is capable of remedy but not within such
thirty (30) day period, furnish to the non-defaulting Party a
detailed programme ("Remedial Programme") for the remedy as
promptly as is practicable of the Default; or
(b) the defaulting Party fails to remedy the Default in accordance with
the Remedial Programme, or such Default is not capable of remedy,
39
then the non-defaulting Party may give notice to the defaulting Party
that such Default is an "Event of Default", but not event specified in
Clause 16.1(a) or 16.2(a) which is capable of remedy shall be an Event
of Default except pursuant to the provisions of this Clause 16.4.
16.5 TERMINATION: Upon an Event of Default the non-defaulting Party may upon
not less than seven (7) days notice to the defaulting Party terminate
this Agreement.
16.6 SURVIVAL OF RIGHTS: The expiry or termination of this Agreement shall
not affect any rights or obligations which may have accrued prior to
such expiry or termination and shall not affect obligations of each of
the Parties under this Agreement which are expressed to continue after
such expiry or termination.
16.7 TERMINATION DUE TO NON-SATISFACTION OF CONDITIONS PRECEDENT:
Notwithstanding any provision contained herein to the contrary, if this
Agreement is terminated in circumstances where any of the conditions
referred to in Part A of Schedule 6 has not been satisfied by the Long
Stop Effective Date other than by reason of a breach by the Seller of
its obligations under Clause 3.2, KPLC shall pay the Seller for its
costs and expenses incurred with respect to this Agreement, a lump sum
amount of one million United States Dollars (US$1,000,000) within thirty
(30) days of such termination.
16.8 SATISFACTION OF REQUIREMENTS:
The Parties hereby acknowledge that all of the Conditions Precedent have
been fulfilled.
CLAUSE 17: INDEMNIFICATION AND LIABILITY
17.1 LIABILITY: Subject to Clauses 17.2, 17.3 and 17.4, each Party shall be
liable to the other Party for the loss directly and foreseeably
resulting from any breach by the first Party of its obligations
hereunder.
17.2 OWN LOSS: Notwithstanding Clause 17.1, each Party shall be responsible
for, and shall indemnify the other Party against claims in respect of,
loss of or damage to persons or property incurred by the first Party and
its contractors, employees and agents resulting from the act, omission
or negligence of either Party in performance of or otherwise in
connection with this Agreement.
17.3 EXCLUDED LIABILITY: Except as provided in Clause 17.1, neither Party
shall have any liability to the other for any loss or damage or other
liability, whether arising in contract, tort or otherwise, in connection
with this Agreement.
17.4 CONSEQUENTIAL LOSSES: In no case shall either Party be liable to the
other for any indirect or consequential losses or damages.
CLAUSE 18: CONFIDENTIALITY
18.1 CONFIDENTIAL INFORMATION: Each Party agrees that it will, and will
ensure that its employees, officers and directors will, hold in
confidence all information, documentation, data and know-how disclosed
to it by the other Party and designated in writing as 'confidential'
("Confidential Information"), and will not disclose to any
40
third party or use Confidential Information or any part thereof without
the other Party's prior written approval, provided that:
(a) this Clause shall not apply to Confidential Information which is in
the public domain other than by reason of a breach of this Clause
18.1, or was already in the rightful possession of the recipient
Party, or was obtained by the recipient Party in good faith from a
third party entitled to disclose it; and
(b) a Party may disclose Confidential Information in accordance with
any legal requirement to do so, or to financial institutions,
multi-lateral agencies, consultants and contractors whose duties
reasonably require such disclosure.
18.2 SURVIVAL: The provisions of this Clause 18 shall survive the termination
or expiry of this Agreement.
CLAUSE 19: DISPUTE RESOLUTION
19.1 GOOD FAITH DISPUTE RESOLUTION PROCEDURE
If either Party raises a dispute in good faith under or in connection with this
Agreement or with the Olkaria III Project Security Agreement, it shall be
resolved according to the following procedure ("Good Faith Dispute Resolution
Procedure"):
For 15 calendar days after receipt of notice of dispute, the Parties shall
exercise their best efforts to resolve the dispute. If no resolution is achieved
within such 15 day period, within two business days of the end of the 15 day
period, the disputing Party has notified the other Party of its intention to
contest and refer the dispute to arbitration or to an agreed Expert in
accordance with the relevant terms of the Agreement or the Olkaria III Project
Security Agreement (as the case may be), and, within twenty-eight (28) days from
the end of the above 15 day period, refers the dispute to and diligently pursues
contestation of the dispute in arbitration proceedings or before an agreed
Expert in accordance with the relevant terms of the Agreement or the Olkaria III
Project Security Agreement (as the case may be).
19.2 ARBITRATION: Subject to Clauses 19.1 and 19.3 any dispute or difference
of any kind between the Parties in connection with or arising out of
this Agreement or the breach, termination or validity hereof (a
"Dispute") shall be finally settled under the Rules of Conciliation and
Arbitration of the International Chamber of Commerce in accordance with
the said Rules which Rules are deemed to be incorporated by reference
into this Clause 19.2. It is hereby agreed that:
(a) The site of the arbitration shall be London, England;
(b) There shall be a single arbitrator;
(c) The language of the arbitration shall be English;
(d) The award rendered shall apportion the costs of the arbitration;
(e) The award shall be in writing and shall set forth in reasonable
detail the facts of the Dispute and the reasons for the tribunal's
decision;
41
(f) The award in such arbitration shall be final and binding upon the
Parties and judgement thereon may be entered in any Court having
jurisdiction for its enforcement; and the Parties renounce any
right of appeal from the decision of the tribunal insofar as such
renunciation can validly be made.
If there is a conflict between this Agreement and the said Rules, this
Agreement shall prevail.
19.3 EXPERT: Where the Agreement provides that any Dispute or other matter
shall be referred to an Expert or the Parties so agree:
(a) The Expert shall be an independent person who is not of the same
nationality as either of the Parties with relevant experience and
willing to act agreed between the Parties or if not agreed within
fourteen (14) days of a request in writing by either Party
appointed by the President of the Geothermal Resource Council, ▇.▇.
▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ or by The Chairman of
the International Geothermal Association ▇/▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇;
(b) For a period of forty-two (42) days after the appointment of the
Expert of such other period as the Parties may agree, each Party
may make such written submissions at it wishes to the Expert and
shall simultaneously provide a copy to the other Party and at the
end of such forty-two (42) day period each Party shall have a
period of twenty-one (21) days to make counter-submissions to the
Expert (with a ▇▇▇ to the other Party) in reply to the other
Party's written submissions made during the aforementioned
forty-two (42) day period provided that neither Party shall during
such twenty-one (21) day period make any written counter-submission
which purports to reply to raise or refer to any new matters not
raised or referred to in any submission made during the
aforementioned forty-two (42) day period;
(c) At the end of the twenty-one (21) day period referred to in
paragraph (b) above and no later than twenty-one (21) days
thereafter, either Party may, with the consent of the Expert and at
a time and place decided by the Expert, make an oral presentation
to the Expert in the presence of the other Party commenting on or
explaining matters previously submitted to the Expert in writing;
(d) The Expert shall render his determination in writing within
fourteen (14) days of the completion of the oral presentation given
in accordance with Clause 19.3(c) and give reasonable details of
the reasons for his determination;
(e) The decision of the Expert shall be final and binding on the
Parties save in the event of fraud or manifest error;
(f) The Expert shall act as an expert and not as an arbitrator;
(g) In the case of invoices disputed by KPLC in accordance with Clause
11.5 above, the periods stated in Clause 19.3(b) and (c) above
shall be reduced
42
respectively to ten (10) Business Days instead of forty-two (42)
days and five (5) Business Days instead of twenty-one (21) days.
19.4 EXCLUSIVITY: Neither Party shall have any right to commence or maintain
any legal proceeding concerning a Dispute relating to this agreement
until the Dispute has been resolved in accordance with Clauses 19.1
through 19.3, and then only to enforce or execute the award under such
procedure.
19.5 CONFIDENTIALITY: The Parties shall each secure that all Experts and
Arbitrators shall agree to be bound by the provisions of Clause 18 of
this Agreement as a condition of appointment.
19.6 CONTINUANCE OF OBLIGATIONS: KPLC shall continue to perform its
obligations under this Agreement during any Expert or arbitration
proceeding and, provided that all undisputed sums invoiced by the Seller
have been and continue to be paid, the Seller shall continue to perform
its obligations under this Agreement during any Expert or arbitration
proceeding provided that the right to terminate the Agreement pursuant
to Clause 16 is not restricted by this Clause 19.6.
CLAUSE 20: MAINTENANCE AND OPERATING RECORDS
(a) Each party shall keep complete and accurate records and all other data
required by each of them for the purposes of proper administration of
this Agreement. Among other records and data required hereby or
elsewhere in this Agreement, the Seller shall maintain an accurate and
up-to-date operating log, in a format reasonably acceptable to KPLC,
records of:
(i) real and reactive power production for each clock hour and 220 kV,
33 kV bus voltage (as the case may be) at all times;
(ii) changes in operating status, scheduled outages, forced outages and
partial forced outages;
(iii) any unusual conditions found during inspections; and
all such records and data shall be maintained for a minimum of sixty
(60) months after the creation of such records or data provided that
each Party shall not dispose of or destroy any such records or data
after such sixty (60) month period unless the Party desiring to dispose
of or destroy any such records or data give thirty (30) days prior
written notice to the other Party, generally describing the records or
data to be destroyed or disposed of, and the Party receiving such notice
does not object thereto in writing within ten (10) days. If a written
objection is received within such ten (10) day period, the objecting
Party shall have a period of sixty (60) days after the date of such
written objection within which to inspect and copy the records or data
proposed to be disposed of or destroyed, which records and data shall be
made available within such sixty (60) day period by KPLC or the Seller
as the case may be, at such Party's offices in Nairobi. After the
expiration of such sixty (60) day period, the Party desiring to dispose
of or destroy such records or data shall be permitted to do so.
43
(b) Either Party shall have the right, upon ten (10) days prior written
notice to the other Party, to examine the records and data of the other
Party relating to this Agreement or the operation and despatch of the
Early Generation Facility and the Plant at any time during normal office
hours during the period such records and data are required hereunder to
be maintained.
CLAUSE 21: MISCELLANEOUS PROVISIONS
21.1 PROJECT AGREEMENTS AND FINANCING AGREEMENTS:
(a) Prior to the execution of this Agreement the Seller has provided to
KPLC a copy of the articles of association of the Seller, which
copy has been initialled by the Seller for the purposes of
identification.
(b) As soon as possible after the Signature Date and prior to the award
of the Turnkey Construction Agreements and the Operating and
Maintenance Agreement and prior to the signature of the Financing
Agreements and any Site Agreement the Seller provide to KPLC with
draft copies of each such contract. The Seller shall have the right
to delete numerical information and formulae from such draft
contracts. The Seller shall not enter into any Project Agreement or
Financing Agreement unless KPLC has been provided with draft copies
and KPLC has had an opportunity to comment on the draft contracts
to the Seller.
(c) Within fourteen (14) days of receipt of the draft contracts, KPLC
shall have the right to provide comments to the Seller on the draft
contracts if KPLC is of the reasonable opinion that:
(i) the terms of such Project Agreement or Financing Agreement
shall be incompatible with or conflict with the provisions of
this Agreement or materially impair the performance or
implementation of this Agreement; or
(ii) any costs which are passed through to or borne by KPLC under
the terms of this Agreement are or may reasonably be expected
to be increased.
On receipt of KPLC's comments, the Seller shall try to remove the
concerns of KPLC.
(d) Forthwith upon execution of any of the documents referred to in
Clause 21.1(b) the Seller shall provide to KPLC a copy thereof
initialled by the Seller for the purposes of identification.
(e) If at any time any Project Agreement or Financing Agreement is
terminated, an amendment or variation is made to any Project
Agreement or Financing Agreement then the Seller shall deliver to
KPLC a conformed copy of each such document or (so far as such
complete document is not in writing) a true and complete record
thereof within twenty-one (21) days of the date of its execution or
creation, certified as a true copy by an officer of the Seller.
44
(f) Any comments or lack thereof by KPLC shall be without any liability
whatsoever on the part of KPLC and shall not lessen, diminish or
affect in any way the obligations of the Seller under this
Agreement.
21.2 ASSIGNMENT:
21.2.2 Without prejudice to any of KPLC's rights under Clause 21.1, any
assignment by a Party of all (but not part only) of its rights and
obligations under this Agreement is permitted but only with the prior
written consent of the other Party, provided that:
(a) such consent shall not be unreasonably withheld or delayed if the
Party wishing to assign can satisfy the other Party of such
proposed assignee's financial, technical and legal status and
ability to observe and perform this Agreement; and
(b) the Party wishing to assign shall be given notice to that effect to
the other Party and such notice shall have given sufficient
information to show the status and ability of the proposed assignee
to carry out the terms of this Agreement.
21.2.2 The provisions of Clause 21.2.1 do not apply to the collateral
assignment by way of security of the Seller's right, title and interest
in, to and under the PPA and the Olkaria III Project Security Agreement,
including all of the Seller's rights to payments thereunder. Pursuant to
Seller's outstanding request, KPLC will negotiate in good faith and, on
reaching agreement of terms acceptable to all parties, enter into direct
agreements for, inter alia, the above described collateral assignments
by way of security with the Seller and its lenders, the execution of
direct agreements being a prerequisite for achievement of construction
and term financing of the Plant by a third party investor or lender who
is not affiliated with the Seller.
21.2.3 No assignment pursuant to Clause 21.2.1 shall be effective unless and
until the assigning Party has:
(a) procured the proposed assignee to covenant directly with the other
Party (in a form reasonably satisfactory to such Party) to observe
and perform all the terms and conditions of this Agreement and if
reasonably required by the other Party arrange for a guarantee or
other equivalent security in favour of such other Party in respect
of all obligations or liabilities to be assigned; and
(b) provided to the other Party a certified copy of the assignment
(excluding the consideration paid or payable for such assignment).
21.3 SUB-CONTRACTORS: The Seller shall be entitled to engage third parties as
contractors for the performance of its obligations hereunder provided
that no such engagement shall relieve the Seller of its obligations
under this Agreement.
21.4 VARIATION: This Agreement may not be varied nor any of its provisions
waived except by an agreement in writing signed by the Parties.
45
21.5 WAIVERS OF RIGHTS: No delay or forbearance by either Party in exercising
any right, power, privilege or remedy under this Agreement shall operate
to impair or be construed as a waiver of such right, power, privilege or
remedy.
21.6 NOTICES: Except for communications in accordance with the Operating and
Despatch Procedures, any notice of other communication to be given by
one Party to the other under or in connection with this Agreement shall
be given in writing and may be delivered or sent by prepaid airmail or
facsimile to the recipient at the address, and marked for the attention
of the person, specified in Schedule 8 or such other address or person
from time to time designated by notice to the other in accordance with
this Clause; and any such notice or communication shall be deemed to be
received upon delivery, or five (5) days after posting, or on
confirmation of transmission when sent by facsimile.
21.7 EFFECT OF ILLEGALITY, ETC: If for any reason whatever any provision of
this Agreement is or becomes or is declared by any court of competent
jurisdiction to be invalid, illegal or unenforceable, then in any such
case the Parties will negotiate in good faith with a view to agreeing
one or more provisions to be substituted therefore which are not
invalid, illegal or unenforceable and produce as nearly as is
practicable in all the circumstances the appropriate balance of the
commercial interests of the Parties.
21.8 ENTIRE AGREEMENT: This Agreement contains or expressly refers to the
entire agreement between the Parties with respect to its subject matter
and expressly excludes any warranty, condition or other undertaking
implied at law or by custom and supersedes all previous agreements and
understandings between the Parties with respect to its subject matter
and each of the Parties acknowledges and confirms that it does not enter
into this Agreement in reliance on any representation, warranty or other
undertaking by the other Party not fully reflected in the terms of this
Agreement.
21.9 COUNTERPARTS: This Agreement may be executed in two counterparts and by
each Party on a separate counterpart, each of which when executed and
delivered shall constitute an original, but both counterparts shall
together constitute but one and the same instrument.
21.10 WAIVER OF SOVEREIGN IMMUNITY: KPLC agrees that the execution, delivery
and performance by it of this Agreement and the obligations hereunder,
constitute private and commercial acts. In furtherance of the foregoing,
KPLC agrees that:
(a) should any proceedings be brought against KPLC or its assets in any
jurisdiction in connection with this Agreement, or in connection
with any of KPLC's obligations or any of the transactions
contemplated by this Agreement, no claim of immunity from such
proceeding will be claimed by or on behalf of itself or any of its
assets;
(b) it waives any right of immunity which KPLC or any of its assets has
or may have in the future in any jurisdiction in connection with
any such proceedings.
46
CLAUSE 22: GOVERNING LAW
22.1 This Agreement shall be governed by and construed in all respects in
accordance with the laws of Kenya.
AS WITNESS the hands of the duly authorised representatives of the Parties the
day and year first above written.
SIGNED AND SEALED )
FOR AND ON BEHALF OF )
THE KENYA POWER & )
LIGHTING COMPANY LIMITED )
Director
Secretary
SIGNED for and on behalf of )
OrPower 4 INC.: BY ▇▇▇▇▇▇ ▇▇▇▇▇ ) ___________________________
Authorised Representative
47
LIST OF ABBREVIATIONS
To promote clarity the following is a listing of the definitions used within
these schedules. Where there is a conflict between this list and a definition
within the schedules then the definition in the schedules shall be used.
A = the non escalable component of the Capacity Charge Rate as
defined in paragraph 1 above (expressed in US$/kW/month);
ACP(tp) = the total of the Actual Capacity Payments received in the
Operating Year for each month up to and including month m;
AC(y) = the Available Capacity in Settlement Period y (expressed in kW);
AMA(p) = the Actual Monthly Availability of the Plant in month p
(expressed in kWh);
bara = the unit of measurement of pressure with respect to absolute
zero pressure as defined in the International Standards
Organisation Standard ISO 1000:1992 Specification for SI Units
and Recommendations for Use of Their Multiples and Certain Other
Units;
C = the percentage of V represented by the fixed Capacity Charge
Rate;
CC = the Contracted Capacity (expressed in kW);
CCR(p) = the Capacity Charge Rate for month p (expressed in US $/kW);
CC(y) = the Contracted Capacity (expressed in kW) for Settlement Period
y;
CPI(b) = with respect to the Early Generation Facility, the United States
Consumer Price Index for June 1996 and, with respect to the
Plant, the United States Consumer Price Index for March 2005 (=
193.30) or as otherwise described in Schedule 5 of Part B
("Plant Tariff");
CPI(p-I) = the United States Consumer Price Index for the month 3 months
prior to month p;
CP(p) = the Capacity Payment for month p (expressed in US $);
E = the non escalable component of the Capacity Charge Rate as
defined in paragraph 1 above (expressed in US$/kW/month);
ECR(b) = the Base Energy Charge Rate;
ECR(p) = the Energy Charge Rate (expressed in US$/kWh) in month p;
EGAC(y) = the Early Generation Available Capacity in Settlement Period y
(expressed in kW);
EGACP(tp) = the total of the Actual Capacity Payments received in the
Operating Year for each month up to and including month m;
EGCC = the Contracted Capacity of the Early Generation Facility
(expressed in kW);
EGCCR(p) = the Capacity Charge Rate for month p (expressed in US$/kW/month)
EGCP(p) = the Capacity Payment for month p (expressed in US$);
48
EGD = the duration in years between the Early Generation Commercial
Operation Date and the planned date of the Early Generation
Cessation Date;
EGEC(p) = the aggregate amount of Energy Charges (US$) payable in respect
of month p;
EGECR(b) = the Base Energy Charge Rate;
EGECR(p) = the Energy Charge Rate (expressed in US$/kWh) prevailing in
month p;
EGLC = the Capacity on Available as a result of the event of Force
Majeure (expressed in kW);
EGMTA(P) = the Monthly Target Availability (expressed in kWh);
EGNEO(p) = the aggregate Net Electrical Output (kWh) of the Early
Generation Facility in month p;
EGOA = Annual Outage Allowance - as described in Schedule 3;
EGSMA(p) = the Scheduled Maintenance Allowance in month p (expressed in
kWh) representing the total energy not available for delivery in
month p due to scheduled maintenance outages computed assuming
the Early Generation Capacity would otherwise have been
dispatched at its Contracted Capacity calculated using the
values of EGSMA set forth in Schedule 3;
EGUSMA(p) = the Unscheduled Maintenance allowance in month p (expressed in
kWh);
G = the percentage of V represented by escalable costs;
H(p) = the hours in month p;
H(r) = the enthalpy of the geothermal fluid expressed in kJ/kg at each
well head at the instant that a reading of MF, is taken;
H(y) = the number of hours in a year being eight thousand seven hundred
and sixty (8760);
H(z) = the unit of measurement of frequency as defined in the
International Standards Organisation Standard ISO 1000:1992
Specification for SI Units and Recommendations for Use of Their
Multiples and Certain Other Units;
LC = the Capacity not Available as a result of the event of Force
Majeure (expressed in kW);
MEC(p) = the aggregate amount of Energy Charges (US$) payable in respect
of month p;
MF(r) = the mass flow rate of geothermal fluid at each well head
expressed in kg/s;
MTA(p) = the Monthly Target Availability (expressed in kWh);
M(y) = the number of months in a year being twelve (12);
NEO(p) = the aggregate Net Electrical Output (kWh) of the Plant in month
p;
NEO(T) = the Net Electrical Output delivered during the test expressed in
kWh;
OA = the Annual Outage Allowance - as set forth in Schedule 3;
49
PPA(t) = the number of years between the Full Commercial Date and end of
the end of the Term;
SMA(p) = the Scheduled Maintenance Allowance in month p (expressed in
kWh) representing the total energy available for delivery in
month p due to scheduled maintenance outages computed assuming
the Plant would otherwise have been dispatched at it Contracted
Capacity;
SP = the number of Settlement Periods in the year;
USMA(p) = the Unscheduled Maintenance allowance in month p (expressed in
kWh); and
V = the Base Capacity Charge Rate.
50
SCHEDULE 1: APPRAISAL PROGRAMME
See Page _______________
51
SCHEDULE 2: FACILITIES TO BE INSTALLED BY KPLC AND THE SELLER
PART A
1 FUNCTIONAL SPECIFICATION OF THE PLANT
A. GENERAL
1.1. PROJECT DESCRIPTION:
(a) INTRODUCTION
The Seller was required to:
conduct a detailed Appraisal Programme and to evaluate the existing
geothermal resources at the Site and to develop ▇▇▇▇▇ and the
geothermal steam field for the supply of steam to the Plant;
design, build and commission of the Early Generation Facility and
subsequently, as determined by the appraisal, the Plant;
connect the Early Generation Facility to the Early Generation
Interconnection Point; and
connect the Plant to KPLC's System via a high voltage connection
leading to the Interconnection Point.
(b) GENERAL DESCRIPTION
As shown in Figure 1, the Olkaria geothermal resource lies about
five (5) km to the south-east of Lake Naivasha and covers an area
estimated to be over seventy five (75) square kilometres.
Except by specific agreement, all of the Early Generation Facility
and the Plant will be located within the Licence Area indicated on
the map in Figure 2 in the western area of the resource. KPLC has
drilled and tested 8 deep ▇▇▇▇▇ in the area and these are assigned
to the Seller for fluid production, reinjection, monitoring and/or
maintenance.
The Seller has carried out an appraisal of the geothermal resource
to establish the capacity of the geothermal resource for power
generation. An Early Generation Facility of 8 MW Contracted
Capacity was later increased to approximately 12 MW in the year
2000, and was constructed at the Site by the Seller as required,
before the completion of the appraisal of the geothermal resource
utilising the completed exploration ▇▇▇▇▇ for power generation. The
Early Generation Facility consists of three binary energy
converters, two of approximately 5 ▇▇ ▇▇▇▇▇ output each and the
third of approximately 3 MW output. The converters are air cooled
and run on the heat energy from geothermal fluid extracted from the
existing ▇▇▇▇▇ drilled by KPLC within the Licence Area. The Early
Generation Facility supplies electrical energy to
52
KPLC's System at an agreed voltage through an interconnector
constructed by KPLC ("KPLC's Transmission Interconnection").
The Plant will be at a single Site within the geothermal Licence
Area connected to the ▇▇▇▇▇ by pipelines conveying single or dual
phase steam and water. The Plant will consist of three (3) binary
energy converter Units of the Early Generation Facility (Units 1, 2
and 3) and three (3) additional binary energy converter Units
(Units 4, 5 and 6).
The Plant will supply electrical energy to KPLC's System through an
interconnector linking the Plant to a 220 kV substation to be built
by KPLC at Olkaria II. Following expiry of the Term the Plant shall
remain fit for further service.
The Seller shall not drill any ▇▇▇▇▇ at any point within 100 metres
of the boundary of the Licence Area. Drilling may not be directed
under the area excluded by the licence boundary and the line 100
metres from the boundary.
Subject to any legislative or licensing constraints affecting this
functional specification, the siting of new ▇▇▇▇▇, steam field
facilities, the Early Generation Facility and the Plant will be the
responsibility of the Seller who will be expected to conduct its
operations in accordance with Prudent Operating Practice. GOK will
make available to the Seller that part of the Site which may be on
public land. Access to private land will be the responsibility of
the Seller.
(c) SCOPE
The Seller shall extract geothermal energy from beneath the Licence
Area in compliance with its geothermal resources licence and
electric power production license and with this Agreement and shall
convert the energy efficiently into electricity for sale to KPLC at
the Early Generation Interconnection Point/Interconnection Point.
The Early Generation Facility and the Plant shall be designed to
enable the Seller to meet the obligations of this Agreement.
The scope of the Seller's duties shall include but not be limited
to:
design, procurement, construction, operation and maintenance of the
existing and additional ▇▇▇▇▇, the steam collection and water
disposal systems, the Early Generation Facility, the Plant and 220
kV Transmission Interconnector;
compliance with the provisions of the geothermal resources licence
including:
o measurement and monthly reporting of the geothermal energy
extracted and of the electricity available and supplied; and
o monitoring reporting and participating in field management of
the geothermal reservoir.
53
1.2 GENERAL INFORMATION:
(a) GEOTHERMAL CONSIDERATIONS
The Seller will follow good geothermal engineering practice in all
aspects of design drilling and construction operation and
maintenance particularly including, but not limited to, the effects
of:
hot and/or unstable ground;
elevated temperatures on material properties, equipment
requirements, well control and other practices;
hydrogen sulphide and other gases affecting personal safety and
corrosion of copper-bearing materials;
earthquakes.
(b) AMBIENT CONDITIONS
The Plant shall be designed and constructed to take account of the
following ambient conditions:
(i) GENERAL
Maximum ambient air temperature 35 DEG.C
Minimum ambient air temperature 1 DEG.C
Average ambient air temperature in any one year 18 DEG.C
Average relative humidity at midday 57%
Minimum relative humidity 70%
Average annual rainfall 714 mm
Isokeraunic level 60-70 days/annum
Design maximum wind speed 35 m/s
Ambient pressure 0.8 bara
(ii) REFERENCE CONDITIONS
Atmospheric pressure 0.8 bara
Ambient air temperature 16.5 DEG.C
Wet bulb temperature 13.3 DEG.C
54
1.3 GENERALLY APPLICABLE CODES AND STANDARDS
The Plant shall comply with the requirements of all applicable
legislation, orders, decrees, instruments, etc. of the Republic of Kenya
including but not limited to:
Health and safety in employment;
Codes of practice for the design and safety, operation, maintenance
and servicing of pressure vessels;
Noise;
Electricity regulations/codes of practice;
Public works;
Fire Protection;
Environmental Protection
Where appropriate legislation is not available, the latest version of
national or international standards will be used to define the minimum
requirements. The mixing of various national and international standards
shall only be permitted with the prior approval of KPLC or its
representative. This Functional Specification is based on the use of one
set of standards for each discipline:
Civil Works - Kenyan Standards with supplementary requirements for
seismic design as given in Unified Building Code of USA;
Mechanical Works - ASME/ANSI, API and ASHRAE;
Electrical Control and Instrumentation - IEC, IEEE, ANSI;
Quality Systems - International Standards Organisation standard ISO
9000 series;
Deviations from the referenced standards or substitution by equivalent
ones shall be subject to the approval of KPLC or its appointed
representative.
1.4 ENVIRONMENTAL ASPECTS
The project and all of the plant therein shall comply with the latest
environmental guidelines contained within the "Geothermal Energy"
section of the latest version of the "Industrial Pollution Preventions
and Abatement Handbook" published by the World Bank Environment
Department in collaboration with the United Nations Industrial
Development Organisation and United Nations Environmental Programme
current at the Effective Date of this Agreement, except wither KPLC
provide written agreement to variations or where other more onerous
requirements are imposed within this Agreement.
55
All equipment will be designed and constructed to minimise the
environmental impact.
The Seller shall give consideration to visual impact, wildlife habitat
and temporary disturbance during construction, maintenance and
operation. The Seller will produce and abide by a detailed statement on
the manner in which the construction and operation will avoid or
mitigate adverse effects on the environment including the aspects listed
below which have been identified as requiring specific attention. Seller
shall be especially sensitive to the National Park status of the land
within which the Licence Area is located.
(a) AIR QUALITY
Water vapour and gases (especially hydrogen sulphide) will be
dispersed so as to avoid concentrations at ground level which are
unacceptable as to personal safety, smell and condensate spray.
(b) LIQUID AND SOLID WASTES
Liquid drilling wastes will be ponded. Residual quantities of
liquid and solid wastes will be treated and/or removed to allow
Site restoration. Drainage of surface water will be arranged to
avoid the risk of erosion of the light volcanic soils.
Spent geothermal water shall be reinjected into the ground at
points which cause minimal disturbance to the geothermal reservoir
and which comply with the geothermal licence.
(c) LAND DISTURBANCE
Earthworks shall be kept to a minimum and so managed as to avoid
soil erosion and to achieve permanent restoration.
Well sites and the Plant shall be fenced but pipelines shall be
designed to allow easy movement of animals including giraffes and
other wildlife across the Licence Area.
(d) VISUAL ASPECTS
As far as practicable, visual changes to the landscape shall be
minimised. Consistent with safety and other engineering needs,
Seller shall select locations, shapes and colours which merge into
or enhance the appearance of the area including the growing of
trees to soften the effect of the Plant structures.
(e) NOISE
In addition to limiting steady and intermittent levels of noise to
recognised safety levels for humans, Seller shall ensure that the
unusually quiet nature of
56
the National Park and the susceptibility of wildlife to high noise
levels are recognised in the design of the Plant and its facilities
and the operating procedures.
The noise limits at the Early Generation Facility and Plant
boundary fencing shall be in accordance with the Environmental
Impact Assessment.
1.5 PROJECT PROGRAMMING
The Seller shall submit a detailed schedule showing key activities and
the timetable necessary to achieve completion of the programme of work.
The programme of work will include the design, manufacture,
construction, commissioning and any planned maintenance for the complete
development. During the Appraisal Period the Seller shall submit a
report every two (2) months to KPLC or its appointed representative
detailing the progress of the appraisal process and an estimated
completion date. During the construction period of both the Early
Generation Facility and the Plant the Seller will submit monthly reports
to KPLC or its appointed representative to give the best estimated time
to completion and demonstrate that all reasonable measures are being
taken to maintain that schedule.
1.6 QUALITY ASSURANCE REQUIREMENTS:
(a) QUALITY SYSTEM
Seller shall have a certified Quality System that meets the
requirements of the International Standards Organisation standard
ISO 9000 series of standard or equivalent.
The Seller shall provide details to KPLC of a programme to ensure
that the Early Generation Facility and the Plant operates to the
standards, which programme shall include details of measures to
monitor performance against such standards under surveillance, at
least three (3) months prior to the start of construction.
At least three (3) months prior to the Early Generation
Commissioning Date and again three (3) month prior to the Plant
Commissioning Date a plan containing the applicable procedures,
design, verification, plans and inspection test plans for the Early
Generation Facility and Plant, as the case may be, shall be
submitted to KPLC. KPLC reserves the right to examine any
procedures referred to in the plan and to audit the Seller against
the requirements of the plan at any time.
Three (3) copies of all appropriate quality records as required by
applicable codes and standards shall be submitted to KPLC or its
appointed representative for review prior to or concurrent with the
arrival in Kenya of all materials and equipment required for the
Project.
57
(b) INSPECTION AND TESTING
The Early Generation Facility and the Plant shall undergo
inspection and testing during manufacture, erection and on
completion for verification that the components satisfy all the
requirements as specified. All inspection and testing shall be
conducted in accordance with the applicable codes and standards.
The Seller shall consider the provisions specified as minimum
requirements and also use its own experience in determining
requirements for additional inspection and testing that it
considers necessary. KPLC shall have the right to inspect any
records of this inspection or testing.
2. CIVIL ENGINEERING AND CONSTRUCTION
2.1 GENERAL
Where a building, detail, material or other item is not covered by this
specification then it shall be based on accepted building practice using
appropriate high quality materials.
2.2 SITE PREPARATION
The Seller will conduct a pre-construction survey of the Licence Area.
The survey shall demonstrate that all work for the Early Generation
Facility, the Plant and the steam field, including construction
requirements, lies within the Licence Area.
2.3 DWELLINGS
The Seller will provide all accommodation or dwellings required for the
construction and operation phases. Dwellings are not permitted within
the National Park.
3. STEAMFIELD
3.1 DRILLING, WELL CONTROL, ABANDONMENT
Well design materials and drilling practices shall comply generally with
relevant petroleum industry standards including API codes modified for
geothermal conditions as contained in [NZSI 2403:1991 Code of Practice
for Deep Geothermal ▇▇▇▇▇] and with the requirements of the Seller's
geothermal licence.
At all times during its life ever well shall be so operated, worked over
or repaired externally as to mitigate the effects of corrosion, erosion
and other weaknesses. Downhole and surface inspections shall be made as
required in the geothermal licence to ensure safety for persons, surface
property and reservoir competence.
Before drilling or workovers commence the Seller shall provide to and
have agreed by the KPLC detailed programmes of work. ▇▇▇▇▇ which are no
longer useful or safe shall be cemented and abandoned in the manner
specified in [New Zealand Standard NZSI 2402] or as otherwise agreed
with the KPLC.
Unproductive ▇▇▇▇▇ shall be sealed and left in a condition agreed with
KPLC.
58
If following the Appraisal Works no further development is to be
undertaken all ▇▇▇▇▇ shall be left in a safe condition as agreed by KPLC
at the time.
3.2 STEAM AND WATER SYSTEMS
The layout, sizing and optimisation of the pipework and associated
equipment will be undertaken by the Seller. For overland piping thermal
insulation complete with cladding shall be installed to limit the
surface temperature to 50 DEG C.
The following standards shall be used:
Pressure Vessel American Society of Mechanical Engineers standard
ASME VIII;
Piping American National Standards Institute standard
ANSI B31.1;
Valves SME 16.4
The geothermal fluid extracted from the resource shall be quantified for
the purpose of resource monitoring and commercial reasons. The
pressures, temperatures and flows for both steam and separated water
shall be logged on a continuous basis. Regular chemical analyses shall
also be conducted and logged.
4. EARLY GENERATION FACILITY AND PLANT
4.1 GENERAL REQUIREMENTS
(a) GENERAL
The design and construction of the Early Generation Facility and
the Plant shall meet the performance requirements set out herein.
Adequate design margins shall be included to allow for normal
deterioration of plant performance between overhauls and
de-scaling. All equipment used shall be new plant of proven design
suitable for operation under the environmental conditions found at
the geothermal site.
(b) DESIGN LIFE AND AVAILABILITY
The Early Generation Facility, the Plant and all components shall
be designed for the following minimums:
Design Life 25 years
Average Annual Unit Availability Factor over the Term - for the
Early Generation Facility - 92%, and for the Plant - 96%
where:
59
Availability Factor = Available Hours x 100
---------------------
Period
Period Hours = 8,760
Available Hours = Period hours minus planned and unplanned
outage hours
The high availability specified above shall be achieved with the
use of standby equipment (redundancy) and design measures to give
extended periods of operation between cleaning/planned maintenance
shut-downs.
4.2 MECHANICAL EQUIPMENT
(a) ROTATING EQUIPMENT
Steam turbines shall be designed manufactured and tested to
International Electrotechnical Commission standard IEC 45 or
equivalent applicable code and all referenced standards. The
turbines shall be capable of operating for at least 15 minutes at
no load. The turbines shall be capable of stable automatic
transition to no load operation following disconnection from KPLC's
System. Turbines shall be designed to operate under all variations
of chemical and physical characteristics of geothermal steam.
For the evaluation of the performance test ASME steam tables shall
be used.
For turbines using motive fluids other than steam the design
principles for steam turbines as defined in the referenced
standards shall be adopted where appropriate. These turbines shall
comply with the performance requirements specified for the steam
turbine, i.e. capability of operating for at least 15 minutes at no
load and stable automatic transition to no load operation following
disconnection from KPLC's System.
Pumps shall be designed, manufactured and tested to Hydraulic
Institute Standards or AWWA as applicable.
(c) PRESSURE VESSELS AND PIPING
The following standards shall be used:
Pressure Vessel American Society of Mechanical Engineers standard
ASME VIII;
Piping American National Standards Institute standard
ANSI B31.1;
Valves American Society of Mechanical Engineers standard
ASME 16.4
60
(d) HEAT EXCHANGERS
The following standards shall be used:
Condenser Heat Exchanger Institute;
Cooling Tower CTI Codes/Civil building codes;
Tubular Heat Exchangers Tubular Exchangers Manufacturers
Association Standard TEMA class C
4.3 CONTROL, INSTRUMENTATION AND ELECTRICAL EQUIPMENT
(a) OUTLINE OF ELECTRICAL REQUIREMENTS
The generators of the Early Generation Facility shall be connected
to KPLC's System at the Early Generation Interconnection Point. The
interconnector shall consist of a single overhead transmission line
at an agreed voltage to be built by KPLC to transfer the full
output from the Early Generation Facility. The Seller may propose
suitable designs for the interconnection including arrangements for
generators, auxiliary supplies and interconnector switching. The
design shall comply with existing KPLC design standards and
criteria and enable the output of each generator to be controlled.
A single line diagram is given in Figure 4.
The characteristics of the KPLC system are as follows:
Nominal rated voltage 33 kV;
Operating voltage range + 10%;
Nominal frequency 50 Hz;
Operating frequency range + 2.0 Hz
Max prospective short-circuit current 40 kA (rms, symmetrical)
The main generators of the Plant shall be connected via individual
step up transformers, with no load tap chargers, to a high voltage
interconnector to the Olkaria II substation (the substation to be
constructed by KPLC).
The interconnector shall consist of a single circuit rated to
transfer the full output from the Plant. The interconnector shall
be constructed at 220 kV.
One bay will be provided at the 220 kV Olkaria II substation by
KPLC and the Seller will propose suitable designs for the
interconnection including arrangements for voltage transformation
and interconnector switching. A single line diagram is given in
Figure 3.
The characteristics of the KPLC 220kV system ("System
Characteristics") are as follows:
61
Nominal rated voltage 220 kV;
Operating voltage range +10%;
Nominal frequency 50 Hz;
Operating frequency range + 2.0 Hz;
Maximum prospective short-circuit current 40 kA (rms, symmetrical)
(b) GENERATORS AND ASSOCIATED CONTROL EQUIPMENT
Each generator of the Early Generation Facility shall be rated on a
continuous running duty basis, duty Type SI, for a design power
factor of 0.85 lagging to 0.9 leading. The maximum continuous
rating of the Early Generation Facility after completion of the
third energy converter unit, is approximately 12 MW and shall be
the output available at the Delivery Point at rated voltage,
frequency and power factor.
Each generator of the Plant shall be rated on a continuous running
duty basis, duty Type SI, for a design power factor of 0.8 lagging
to 0.9 leading. The maximum continuous rating was originally
expected to be 64 MW but, was determined to be 48 MW pursuant to
the completion of the Appraisal Works. All references to 64 MW from
now on in these Schedules shall be taken to mean the assumed value
and may be subject to change in light of the Appraisal Works and
shall be that output available at the Delivery Point at rated
voltage, frequency and power factor.
All generators shall be equipped with a continuously acting fast
response automatic excitation system of either brushless or static
type with a high initial response characteristic (excitation system
voltage response time of 0.1 second or less).
The generator automatic voltage regulators shall be capable of
maintaining terminal voltage to an accuracy of + 0.5%, relative to
a constant reference value, adjustable over the range + 10%, to
ensure adequate steady state stability.
The generator short circuit ratio at rated MVA shall not be less
than 0.5.
Automatic synchronising equipment shall be provided for the
generator circuit breakers. Manual synchronising, complete with
check synchronising facilities relays shall be provided for the
generators/step up transformers.
(c) POWER TRANSFORMERS
The generator step up transformers of the Plant shall be rated for
maximum duty. They shall be fitted with on load tap changers with a
tapping range such as to permit maximum export with the generator
at rated voltage and 0.85 lagging power factor, with KPLC's System
operating at a voltage of 220kV.
62
(d) EMERGENCY AND MAINTAINED POWER SUPPLIES
The Seller shall ensure that sufficient and reliable standby power
supplies are available during loss of normal power supplies, such
that continuous operation of all equipment which may be required
during such periods can be maintained.
(e) EARTHING AND LIGHTING PROTECTION
The Seller shall include a complete and integrated earthing and
lightning protection system for the overall Site.
(f) COMMUNICATIONS
Communications with KPLC shall be via telephone line to Olkaria I
in accordance with its requirements. The Seller shall provide one
telephone extension and one fax extension on each of KPLC's control
networks. These telephones shall not be interconnected to any
system which is connected to the public telephone system.
Provisions shall be made by the Seller for data interconnections to
KPLC's SCADA system.
The Seller will install a dedicated computerised system for
acquisition of plant data and calculation of all plant
characteristics which are related to power generation and
efficiency of conversion, to enable payments from KPLC to the
Seller to be calculated. The Seller shall also log all dispatch
requirements. A remote visual display unit, terminal and printer
capable of interrogating the computer system shall be provided to
KPLC's premises at Juja Road, Nairobi, communicating via telephone
modem.
4.4 OPERATING CHARACTERISTICS
4.4.1 EARLY GENERATION FACILITY
(a) UNIT STARTS
The notice required by the Seller to start up a binary energy
converter Unit (BEC) of the Early Generation Facility will vary
according to the length of time that the turbine generator of the
binary energy Converter has been shut down. The Early Generation
Facility shall be able to start up the various components within
the following time periods:
SCOPE OF SHUTDOWN NOTICE REQUIRED TO SYNCHRONISE
Early Generation Facility BEC 1 hour
Steam Field 6 hours
▇▇▇▇▇ 12 hours
63
(b) UNIT LOAD RAMPING RATE
The maximum Unit load ramping rate during synchronisation and a
load to full load under normal conditions shall be no more than 10%
of Unit rated capacity per minute.
(c) STEP LOADING
Any Unit shall be able to accept an instantaneous load variation of
5% of rated capacity.
(d) LOAD REJECTION
Any Unit and the Early Generation Facility must remain in a safe
condition following a sudden full load rejection and must be
capable of re-synchronisation within 30 minutes.
(e) FREQUENCY LIMITATION
The frequency limitation of the Early Generation Facility for
continuous operation is between the range 48.0 and 52.0 Hz.
(f) POWER FACTOR
Each unit is capable of operating at Rated Capacity with a
generation power factor measured at the generator terminals in the
range of 0.85 lagging to 0.90 leading.
(g) VOLTAGE LIMITS
The Early Generation Facility shall be capable of operating with
the variation of +/- ten percent (10%) at the generator terminals.
The Early Generation Facility will automatically trip if the
voltage exceeds this range.
4.4.2 PLANT
(a) UNIT STARTS
The notice required by the Seller to start up a turbine generator
unit will vary according to the length of time that the turbine
generator has been shut down. The Plant shall be able to start up
the various components within the following time periods:
SCOPE OF SHUTDOWN NOTICE REQUIRED TO SYNCHRONISE
Generating Plant 3 hours from cold, 1 hour from hot
Steam Field System 6 hours
▇▇▇▇▇ 12 hours
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(b) UNIT LOAD RAMPING RATE
The maximum Unit Load ramping rate during synchronisation and
loading to full load under normal conditions shall be no more than
ten percent (10%) of Rated Capacity per minute.
(c) STEP LOADING
Any unit shall be able to accept an instantaneous load variation of
five percent (5%) of rated capacity.
(d) LOAD REJECTION
Any Unit and the Plant must remain in a safe condition following a
sudden full load rejection and must be capable of
re-synchronisation within thirty (30) minutes.
(e) FREQUENCY LIMITATION
The frequency limitation of the Plant for continuous operation is
between the range forty eight (48.0) and fifty two (52.0) Hz.
(f) POWER FACTOR
Each unit is capable of operating at Rated Capacity with a
generation power factor measured at the generator terminals in the
range 0.85 lagging to 0.90 leading.
(g) VOLTAGE LIMITS
The Plant shall be capable of operating with variation of +/- ten
percent (10%) of the voltage on the high voltage terminals of the
step up transformers with no-load tap changer in operation. The
Plant will automatically trip if the voltage exceeds this range.
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PART B: THE SELLER'S CONNECTION FACILITIES INCLUDING THE TRANSMISSION
INTERCONNECTOR AND KPLC'S CONNECTION FACILITIES
1 TRANSMISSION INTERCONNECTOR
The Seller shall construct a single circuit Transmission Interconnector between
the Plant and the KPLC's Connection Facilities which are located at the Olkaria
II power station 220 kV switchyard. The Transmission Interconnector shall be
designed in accordance with existing KPLC design standards and criteria. The
design criteria considering line design basis, protection and communication
requirements, including inter-tripping requirements are set out in Part C of
this Schedule 2.
2 GENERATING UNIT PROTECTION DEVICES
The Units shall be equipped with the following protection devices and KPLC and
the Seller shall agree the necessary settings for these:
(i) Stator Earth Fault;
(ii) Negative Phase Sequence;
(iii) Step up transformer over current and earth fault; and
(iv) High voltage busbar protection (if appropriate).
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PART C: DESIGN CRITERIA - TRANSMISSION INTERCONNECTOR
1 - TEMPERATURE LIMITS AND WIND LOADINGS
ITEM DESCRIPTION DETAIL
---- ----------- -----------
1. TEMPERATURES
1.1 Minimum temperature of conductors DEG. C -1
1.2 Maximum temperature of conductors DEG. C 75
1.3 "Everyday" temperature of conductors DEG. C 25
2. WIND PRESSURE
2.1 Wind pressure on projected area of conductors, earth wires and insulators N/m(2) 383
2.2 Wind pressure on projected area of members of one face of tower N/m(2) 690
2 - FACTORS OF SAFETY
MINIMUM
ITEM DETAIL FACTOR
---- ------ -----------
CONDUCTORS
1. Conductors and earth wire at final maximum working tension based on 3.0
ultimate nominal breaking load.
2. Conductors and earth wire in still air at everyday temperature final 5.0
tension based on ultimate nominal breaking load.
3. Anchor clamps and mid-span joints based on conductor or earth wire 0.95
ultimate nominal breaking load.
INSULATORS AND FITTINGS
4. Tension set failing load based on conductor maximum working tension 3.0
5. Suspension set failing load based on the resultant of maximum vertical 3.0
and transverse loadings under normal working conditions.
SUPPORTS
6. Steel towers under normal working conditions. 2.5
7. Steel towers under broken wire conditions. 1.25
8. Foundations under normal working conditions. 2.5
9. Foundations under broken wire conditions. 1.5
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3 - MINIMUM CLEARANCES
The following are the minimum clearances between live conductors and other
objects, which correspond to the condition of maximum sag of conductor either in
still air or at maximum swing condition.
CLEARANCE
ITEM DESCRIPTION 220 kV
---- ----------- ---------
3.1 Minimum clearances from Conductor in m:
(i) to normal ground 7.5
(ii) to metal clad or roofed buildings, or other buildings or structures upon which a 5.2
man may occasionally stand
(iii) to electric power line wires (line or earth) 4.0
(iv) to telephone lines 4.0
(v) to paved roads 8.5
(vi) to railways 8.5
(vii) to be added to the above clearances to allow for conductor creep (at mid span) 0.6
3.2 Minimum clearance from live metal to support steelwork on suspension supports in mm:
(i) from 0-25 DEG. swing 2200
(ii) from 25 DEG. to 45 DEG. swing 2100
3.3 Assumed maximum transverse swing from the vertical of suspension insulator strings 45 DEG.
on straight line supports
3.4 Minimum clearance from live metal to earthed metal at tension supports in mm:
(i) in still air 2200
(ii) jumper loops under 25 DEG. swing 2100
3.5 Assumed maximum angle of swing from the vertical of jumper loops 25 DEG.
3.6 Maximum shielding angle of earth wire (in still air) on conductor at tower 0 DEG.
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4 - BROKEN WIRE CONDITIONS
MAXIMUM NUMBER OF COMPLETE PHASE OR EARTH
ITEM TOWER TYPE CONDUCTORS BROKEN
---- ---------- --------------------------------------------
4.1 Suspension, Single Circuit Any one phase or one earth wire (tension
reduced to 70% of maximum working tension
for broken phase only).
4.2 Suspension, Double Circuit Any one phase and one earth wire or any two
phases (tension reduced to 70% of maximum
working tension for broken phases only)
4.3 All other tower types Any two wires, phase or earth, at maximum
working tension
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5 - SPAN LENGTHS
SPAN LENGTHS
ITEM DESCRIPTION (m)
---- ----------- ------------
5.1 Basic (design) span 370
5.2 Wind span (Suspension and (i) Normal condition 410
Angle Tension towers)
(ii) Broken wire 310
Wind span (Terminal towers) Normal condition 220
5.3 Weight span for Suspension towers (i) Normal condition 740
(ii) Broken wire 560
Angle Tension towers (i) Normal condition 1110
(ii) Broken wire 840
Terminal towers Normal condition 840
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6 - SUPPORT AND FOUNDATION DESIGN DATA
ITEM DESCRIPTION DETAIL
----- ----------- ------
6.1 SUPPORTS
6.1.1 Maximum ration of unsupported length of steel compression
members to their least radius of gyration (L/R):
(a) Main members 120
(b) Bracings 200
(c) Redundants 250
(d) Bracings Loading in tension only 350
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7 - SUPPORT AND FOUNDATION DESIGN DATA
LIGHT HEAVY WATER-
CONCRETE CONCRETE SOFT LOGGED ROCK
ITEM DESCRIPTION BLOCK BLOCK ROCK SOIL ANCHOR
----- ----------- -------- -------- ---- ------ ------
7.2 FOUNDATIONS
7.2.1 Assumed mass of earth resisting 1600 1350 1900 750 20
uplift (kg/m(3))
7.2.2 Assumed angle to vertical of 30 DEG. 30 DEG. 20 DEG. 30 DEG. 15 DEG.
frustum of earth resisting uplift
7.2.3 Assumed mass of concrete resisting 2300 1850 2300 1350 2300
uplift (kg/m(3))
7.2.4 Assumed ultimate earth pressure 370 185 1100 150 2000
for standard foundation under
specified loadings, including
factors of safety (kN/m(2))
7.2.5 Ultimate adhesion value between 0.7 0.7 0.7 0.7 0.7
galvanised steel and concrete,
including factor of safety
(N/mm(2))
7.2.6 Ultimate lateral earth pressure, 100 100 100 -- 100
including factor of safety (for
chimney design) (kN/m(2)/m)
7.2.7 Ultimate plain concrete bearing 13.8 13.8 13.8 13.8 13.8
stress (N/mm(2))
7.2.8 Minimum portion of sub loads to be 50% 50% 50% 50% 50%
allowed for in the design of sub
cleats
7.2.9 Shear stress in rock (kN/m(2)) -- -- -- -- 50
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8 - INSULATORS 220 kV LINES
DETAIL
ITEM DESCRIPTION SUSPENSION TENSION
---- ----------- ------------------ ------------------
8.1 Insulator Type Cap & Pin Cap & Pin
8.2 Insulator Material Glass or Porcelain Glass or Porcelain
8.3 Minimum No. of units per string 15 16
8.4 Minimum Spacing 146 mm 146 mm
8.5 Lightning Impulse 1050 kV 1050 kV
Withstand voltage of complete string
(minimum sea level value)
8.6 Minimum creepage
distance of String (normal) 5664 5664 mm*
(in quarry areas) 6124 6125
* Tension strings shall achieve those values with one unit removed from the
string.
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9 - 220 kV CIRCUIT BREAKER
A Circuit Breaker shall be installed on the outgoing 220 kV line and dedicated
for Protection and Control of the Line.
9.1 TYPE
The Circuit breaker shall be of the SF6 type with individual self contained
spring operated mechanism.
Emphasis is placed on the need for reliability of design in order to give long
continuous service with low maintenance costs. In this respect, spring operated
mechanisms are the preferred type.
9.2 RATINGS
1200 A continuous rating and 31.5 kA, 3 sec. Circuit Breaker.
9.3 OPERATING DUTY AND PERFORMANCE
GENERAL
The requirements of IEC 60056 in respect of type tests service operation and the
making and breaking of faulty currents shall apply to all types of circuit
breakers. Designs shall be suitable for interrupting three-phase ungrounded
faults.
(ii) TEST CERTIFICATES
Circuit breakers shall be covered by test certificates issued by a recognized
short-circuit testing station certifying the operation of the circuit breaker at
duties corresponding to the rated breaking capacities for the circuit breaker.
The test duty shall not be less onerous than the requirements of the standard.
Test certificates or equivalent shall be submitted with the tender.
(iii) RATE-OF-RISE OF RESTRIKING VOLTAGE
Where not specifically stated in the test certificates submitted with the
Tender, the Tenderer shall certify that the TRV to which the circuit breaker was
subjected during the short circuit tests was the most severe condition that
could be imposed by the available test plant for a first phase-to-clear factor
of 1.5.
Any device incorporated in a circuit breaker to limit or control the rate of
rise of restriking voltage across the circuit breaker contacts shall likewise be
to the Engineer's approval and full description of any such device shall be
given.
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(iv) RECLOSURE DUTY
At 220 kV breakers controlling transmission lines and transformer feeders shall
be suitable for high speed single phase and delayed three-phase auto reclosure.
Circuit breakers may be subject to several single shot auto reclosing duty
cycles within quick succession upon the occurrence of multiple faults coupled
with short reclaim timer settings. The Seller shall state the minimum time
interval permissible between each auto reclose duty at rated short circuit
current and advise the number of reclosing operations allowable before lockout
and maintenance becomes necessary.
The main contractor shall ensure the circuit breaker requirements are embodied
in the auto-reclose protection scheme.
(v) INTERRUPTING DUTIES
In addition to the requirements of IEC 60065 for interrupting terminal faults
circuit breakers shall be capable of coping with the interrupting duties
produced by the switching of low inductive currents associated with reactors or
transformers magnetizing currents, or by the switching of capacitor currents
associated with overhead line charging, cable-charging or capacitor banks as may
be applicable. Circuit-breakers for these duties shall be of the restrike-free
type only.
Circuit breaker shall be capable of interrupting currents associated with
short-line faults and the out of phase switching conditions that may occur in
service.
The Seller should include a statement of the accumulative breaking capacity
which the circuit breakers are capable of before maintenance is required.
(vi) BREAK TIME
In respect of 220 kV circuit breakers attention is drawn to Clause 14.3.
(vii) INSULATION CO-ORDINATION
The insulation strength across the open circuit breaker shall be at least 15 per
cent greater than the line to ground insulation strength for all impulse,
switching surge and power frequency voltage conditions.
9.4 OPERATING MECHANISMS
Circuit breakers mechanisms shall be "trip free" as defined in IEC 60056-1. It
is recognized that it may be necessary for contacts to close momentarily prior
to opening to ensure satisfactory current interruptions.
Each part of the operating mechanisms shall be of substantial construction,
utilizing such materials as stainless steel, brass or gunmetal where necessary
to prevent sticking due to rust or corrosion. The overall designs shall be such
as to reduce mechanical shock to a minimum and shall prevent inadvertent
operation due to fault current stresses, vibration or other causes.
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An approved mechanically operated indicator shall be provided on each circuit
breaker operating mechanism to show whether the circuit breaker is open or
closed. Each phase shall incorporate a mechanical indicator or other approved
means of position indication where operating mechanism designs do not utilize
mechanical coupling between phases.
220 kV circuit breaker mechanisms shall be provided with duplicate trip coils in
order to facilitate duplication of trip coil initiation.
Where circuit breakers comprise three independent units as in this case it shall
be possible to make independent adjustments to each unit. For three phase
operation the three units shall make and break the circuits simultaneously. In
the event of any phase failing to complete a closing operation, provision shall
be made for automatic tripping of all three phases of the circuit breaker. This
scheme shall be inbuilt within the circuit breaker. Indications for operation of
this condition shall be indicated locally, remotely and on SCADA.
Power closing mechanisms shall be recharged automatically for further operations
as soon as the circuit breaker has completed the closing operation and the
design of the closing mechanism shall be such that the circuit breaker cannot be
operated inadvertently due to external shock forces resulting from short
circuits, circuit breaker operation, or any other cause.
If a circuit breaker closing mechanism is not fully recharged for further
operation within a pre-determined time after closing cycle, the mechanism shall
be locked out and an alarm initiated.
The circuit breaker shall be provided with slow acting manually powered
operating devices for inspection and maintenance purposes only. It shall not be
possible to slow close a circuit breaker when in normal service condition.
9.5 OPERATING CUBICLES
Circuit breaker operating mechanism, auxiliary switches and associated relays,
control switches, control cable terminations, and other ancillary equipment
shall be accommodated in sheet steel vermin-proof and weather proof cubicles.
Where appropriate the cubicles may be free standing.
Cubicles shall be of rigid construction, preferably folded by alternatively
formed on a frame work of standard rolled steel sections and shall include any
supporting steel work necessary for mounting on the circuit breaker or on
concrete foundations.
Bolts or carriage keys shall not be used to secure the panels or doors. All
fastenings shall be integral with the panel or door and provision made for
locking. Doors and panels shall be rigid and fitted with weather proof sealing
material suitable for the climatic conditions specified.
Cubicle shall be well ventilated through vermin-proof louvers comprising a brass
gauze screen attached to a frame and secured to the inside of the cubicle.
Divisions between compartments within the cubicles shall be perforated to assist
air circulation. In addition, an anti-condensation heater of an approved type
shall be provided and controlled by a single pole switch mounted within the
cubicle.
76
Access doors or panels shall be glazed where necessary to enable instruments to
be viewed without opening the cubicles. The arrangement of equipment within the
kiosk shall be such that access for maintenance or removal of any item shall be
possible with the minimum of disturbance of associated apparatus.
Circuit breaker control position selector and circuit breaker operating control
switches as specified shall be installed in the cubicle. Circuit breaker control
from this position will be used under maintenance and emergency conditions only.
An approved schematic diagram of the part of the control system local to the
circuit breaker, identifying the various components within the cubicle and on
the circuit breaker and referring to the appropriate drawings and maintenance
instructions, shall be affixed to the inside of the cubicle access door. The
diagram shall be marked on durable non-fading material suitable for the
specified site conditions.
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10 - DISCONNECTORS AND EARTHING SWITCHES
Two 220 kV Disconnectors shall be installed, one on either side of the outgoing
220 kV Circuit Breaker. The disconnectors shall be motorized.
The Disconnector shall be rated at 1200 A, continuous rating and 31.5 kA, 3 sec.
withstand.
The disconnector on the Line side shall be equipped with an Earth Switch,
mechanically coupled or interlocked with the main disconnector so that the
earthing switch and main disconnector cannot be closed at the same time.
Disconnecting and earthing devices shall be in accordance with IEC 60129.
The disconnectors shall preferably be of the single throw double air break
centre rotating post type or of the double rotating post type with single air
break and shall be subject to approval. Circuit disconnecting switches shall be
rated at 1200 A continuous rating.
Disconnecting switches shall be designed for live operations and will not be
required to switch current other than the charging current of open bus bars and
connections or load currents shunted by parallel circuits.
Service conditions require that disconnecting switches shall remain alive and in
continuous service for periods of up to two years in the climatic conditions
specified and without operation or maintenance. The contacts shall carry their
rated load and short circuit currents without overheating or welding and at the
end of the two year period the maximum force required at the end of the
operating handle to open a 3-phase disconnector shall not exceed 340N.
The earthing switch, when in closed position shall be capable of carrying the
rated short time current for three seconds without the contacts burning or
welding. The Earth Switch shall be interlocked with the Line CVTs such that it
shall not be possible to close the earth switch when the line is energized.
Disconnecting devices shall be interlocked with circuit breakers and
disconnectors as necessary to prevent the possibility of making or breaking load
current.
The Disconnectors and the Earth switch shall be equipped with Electrical
Interlocks to ensure safe operation. Each Disconnector and the Earth Switch
shall be equipped with a solenoid which will normally be de-energised thereby
mechanically blocking the operation of the Disconnector or the Earth switch.
When all the conditions are right for safe operation of the Disconnector or the
Earth switch, the solenoid shall be energized via a push button switch mounted
on the disconnector/earth Switch control box, thereby allowing the Disconnector
or Earth switch to be operated to the closed of open position. The solenoid
shall only require to be energized at the start of the close or open operation
and shall not be required to remain energized in order to complete the close or
the open operation.
Operation of the Circuit Breaker shall not be permitted when the associated
Disconnector Switches are under operation. Interlock to be achieved by use of
auxiliary switches.
78
Also a mechanical Interlock shall be provided between a Disconnector and the
associated Earth Switch.
Disconnector operation mechanisms shall be of robust construction, carefully
fitted to ensure free action and shall be unaffected by climatic conditions at
site. Mechanism shall be as simple as possible and comprise a minimum of bearing
and wearing parts. Approved grease lubricating devices shall be fitted to al
principal bearings which are not of self lubricating type. The mechanism shall
be housed in a weatherproof enclosure complete with auxiliary switches, terminal
blocks and cable gland plates. All steel and malleable iron parts including the
supporting steelwork shall be galvanized.
The alignment and timing of primary and secondary contacts shall be achieved
with ease. Once achieved, continuous operation of the disconnector without
losing the alignment or timing shall be guaranteed.
79
11- VOLTAGE TRANSFORMERS
Voltage transformers shall be of the capacitor type and shall comply with IEC
60044-2 and the requirements of this specification.
Capacitor type transformer shall be suitable for use as line couplers for power
line carrier communication systems.
Ratings:
Rated Primary Voltage: 220 kV/[X]3
Rated Secondary Voltage: 110 V/[X]3
The rated Burden and Class shall be suitable for the connected Protection Relays
and other devices.
Separate sets of MCBs shall be provided at the CVT for:
Main 1 protection
Main 2 protection
Instruments, disturbance recorder, fault locator, etc.
Check Synchronizer Relay.
The Main 1 Protection and Main 2 Protection circuits shall be segregated in
separate multicore cables from the VT to the Protection panels.
A VT failure Alarm shall be provided for each set of MCBs.
Voltage transformers shall be provided complete with galvanized steel supporting
structures such that the earthed end of all porcelain insulators is not less
than 2440 mm above ground level.
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12 - CURRENT TRANSFORMERS
Current transformers shall comply with IEC 60044-1 and the requirement of this
specification.
Primary winding conductors shall be not less than 100 sq. mm section and shall
have a one second short time current rating not less than that of the associated
switchgear. Secondary windings of each current transformer shall be earthed at
one point only, in the relay panel.
Magnetisation and core loss curves and secondary resistance values shall be
provided for each type and range of current transformer.
Ratings:
CT ratio: ▇▇▇▇-▇▇▇-▇▇▇/ 1 A, to match the remote end CTs
Core 1: 15 VA, 5p20 for Main 1 Protection
Core 2: 15 VA, 5p20 for Main 2 Protection
Core 3: 15 VA, 5p20 for Back-up Protection and Circuit Breaker
Failure Protection
Core 4: 15 VA, Cl 0.2 for Energy Metering
Core 5: For Busbar Differential Protection. Seller to specify to match
other CTs in the Differential Scheme
Current transformers for balance protective schemes, including neutral current
transformers where appropriate, shall have identical turns ratio and shall have
magnetization characteristics to the approval of KPLC for each specific
instance. Where an existing balanced protective system is being extended, the
Seller shall ensure that any additional current transformers are correctly
matched on the existing equipment.
The Seller shall ensure that the capacity of the current transformer provided is
adequate for operation of the associated protective devices and instruments.
The CT cores for Main 1 and Main 2 protection shall be segregated in separate
multicore control cables from the current transformer through to the protection
panels.
Where double ratios are specified it shall be possible to select either ratio
for each winding without alteration to the number of primary turns. A label
shall be provided at the secondary terminals of the current transformer
indicating clearly the connection required for either ratio. These connections
and the ratio in use shall be shown on the appropriate schematic and connector
diagram.
The Seller shall provide details of his method of calculating the outputs of the
current transformers for each type of protection specified and shall submit
calculations for all current transformers for approval by the KPLC before
starting manufacture.
81
13 - SURGE ARRESTORS
Surge arrestors shall be the type employing non-linear metal oxide resistors
without spark gaps.
Arrestors shall be designed and tested in accordance with the requirements of
IEC 60099-4.
Surge arrestors shall be housed in porcelain insulators designed to withstand
extremes of the environment. The insulation shall have a minimum creepage
distance of 25 kV/mm. Porcelain shall comply with IEC 60233.
The method of sealing against the ingress of moisture shall be of a type well
proven in service and the manufacturing procedures shall include an effective
leak test which can be demonstrated to the inspecting Engineer if required.
The internal components of arrestors shall be arranged to minimize radial
voltage stresses, internal corona and to ensure minimal capacitative coupling
with any conducting layer of pollutant on the outside of the porcelain housing.
Except where approved organic materials are not permitted.
Good electrical contact shall be maintained between resistor blocks, which takes
account of any thermal expansion and contraction of the block, mechanical shock
during transport and erection, by installing a well proven clamping system.
Good quality control of the manufacturing process of the resistor shall be
ensured by rigorous testing procedures. The procedures shall ensure that the
characteristics of the blocks area, and will remain within the specified limits
when new and throughout the anticipated life of the arrestors. Samples may be
selected at random by the Engineer for special tests to be agreed with the
manufacturer.
All surge arrestors shall be fitted with a pressure relief diaphragm which shall
prevent explosive shattering of the porcelain housing in the event of an
arrestor failure and the arrestor shall have been tested according to the high
and low current tests specified in IEC 60099-1.
Arrestors shall be supplied complete for installation in an outdoor switchyard
including insulating bases and surge counters, one per phase and, if applicable,
grading rings. The material used for terminals shall be compatible with that of
the conductors to which they are connected.
Each arrestor shall be identified by a rating plate in accordance with the
requirements of IEC 60099. In addition an identification ▇▇▇▇ shall be
permanently inscribed on each separately housed unit of a multi-unit arrestor so
that units can be replaced in the correct position in the event of them being
dismantled.
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14 - PROTECTION AND CONTROL
14.1 MULTICORE CABLES AND SCHEMATIC DIAGRAMS
Protection and control schemes should, in general be based on the use of a
single 1.5 ▇▇.▇▇ [7/0.67 mm] cores. The Multi-core cables shall have steel
Armour for mechanical protection.
This contract includes the preparation of cabling schematic diagrams, showing
the approved routing of cores in the various cables, and detailed cable
schedules and connection diagrams for all the cables associated with each item
of equipment included in the project.
14.2 RELAY GENERAL REQUIREMENTS
All relays shall operate correctly within system frequency limits 47 Hz to 51
Hz.
Relays shall be approved types complying with IEC, shall have approved
characteristics, be flush mounted in dust and moisture proof cases and shall
comply with IEC 60068 test classification 20/40/40.
Relays shall be of approved construction and shall be arranged so that
adjustments, testing and replacement can be effected with the minimum of time
and labour. Relays of the hand reset type shall be capable of being reset
without opening the case.
Electrically reset tripping relays shall be provided where necessitated by the
system of control, such as for those circuits subject to remote supervisory
control.
Relay contacts shall be suitable for making and breaking the maximum currents
which they may be required to control in normal service but where contacts of
the protective relays are unable to deal directly with the tripping currents,
approved auxiliary contactors, relays or auxiliary switches shall be provided.
In such cases, the number of auxiliary contactors or tripping relays operating
in tandem shall be kept to a minimum in order to achieve fast fault clearance
times. Separate contacts shall be provided for alarm and tripping functions.
Relay contacts shall make firmly without bounce and the whole of the relay
mechanisms shall be as far as possible unaffected by vibration or external
magnetic fields.
Relays, where appropriate, shall be provided with flag indicators, phase
coloured where applicable. Flag indicators shall be of the hand rest pattern and
shall be capable of being reset without opening the case. Where two or more
phase elements are included in one case, separate indicators shall be provided
for each element.
All protection relays shall be of the numerical type. The Numerical Relays
provided must have facilities to download information to a PC and via a modem,
to a remote Location via the available communication system. One PC and
associated Software shall be provided. Steps shall be taken to protect the
circuitry from externally impressed transient voltages which could reach the
circuitry via connections to instrument transformers or the station battery.
The routing of cables should be such as to limit interference to a minimum. Any
auxiliary supplies necessary to power solid state circuits shall be derived from
the main station battery and not from batteries internal to the protection.
83
Relays with provision for manual operation from outside the case, other than for
resetting, will not be accepted.
Relays, whether mounted in panels or not, shall be provided with clearly
inscribed labels describing their application and rating in addition to the
general purpose labels.
Attention is particularly drawn to the site climate condition and relay designs
should be entirely suitable for duty under these conditions.
To minimise the effect of electrolysis, relay coils operating on DC shall be so
connected that the coils are not continuously energized from the positive pole
of the battery.
Relays shall be suitable for operation on 110 V nominal, 125 float dc systems
without the use of voltage dropping resistors or diodes.
The contractor shall provide detailed current transformer requirements for each
type of relay.
14.3 FAULT CLEARANCE TIMES
Overall fault clearance times i.e. from fault initiation to arc extinction shall
not exceed the following:
MAXIMUM FAULT CLEARANCE TIME
-------------------------------------------------------------
TYPE OF FAULT MAXIMUM CLEARANCE TIME
220 kV SYSTEM
------------------------------------ ----------------------
Substation and transformer faults 110 mS
Line faults
(a) Up to 72% of the line length 100 mS
(i.e. 90% of a distance relay
Done 1 reach assuming 80%
Zone 1 setting
(b) From 72% to 100% of line length 130 mS
Plus protection
Signalling time
These requirements shall be fulfilled under all system conditions including
maximum dc current offset and shall include any time delay caused by the use of
capacitive voltage transformers.
84
14.4 LINE PROTECTION
14.4.1 DISTANCE PROTECTION
Distance protection for 220 kV lines shall comprise one distance relay installed
by OrPower 4 in Olkaria III Substation operating in conjunction with
teleprotection channels over fibre optic circuits. The distance Protection shall
operate in a permissive overreach mode over a teleprotection signalling channel.
The distance relay shall operate for all types of phase and earth faults.
Separate phase and earth fault distance measuring elements shall be provided.
Common elements with transfer switching arrangements will not be accepted. Phase
and earth fault compensation features shall be incorporated to ensure accurate
distance measurements for all types of fault and to allow for variation in the
path of earth faults on the system.
Zones 1 and 2 shall operate only for faults in the protected direction. Under no
circumstances shall the relay operate for reverse faults even when the voltage
supplied to the relay falls to zero on all three phases. Details of methods used
for polarising relays to deal with faults close to the relaying point shall be
provided.
Zone 3 shall not be non-directional and shall be capable of being independently
off-set in both directions.
Starting shall be by impedance relays; overcurrent starting will not be
accepted. The relay characteristic shall cover the protected line plus the
longest line emanating from the remote station taking current infeed into
account.
The starting relays shall not operate during maximum power transfer. During
single phase to earth fault coinciding with maximum power transfer, only the
starting relay associated with the faulted phase shall operate.
The reach of each measuring zone and starting relay shall be individually
adjustable by suitable steps across the setting range. The characteristic angle
shall be adjustable between approximately 40 and 85 degrees.
Zone 2 and Zone 3 shall have a delay setting range of 0.1 to 1.0 second and 0.5
to 5.0 seconds respectively.
The sensitivity of the protection shall be adequate for definite operation under
minimum plant and single outage conditions and shall not exceed 30 per cent
rated current. The relay characteristic shall ensure adequate earth fault
resistance cover under all conditions.
The operating time of each zone shall be substantially independent of fault
current magnitude. The operating times shall be stated in the Schedule of
Particulars and, in addition, curves shall be provided showing the effect of
line and source impedance, fault position and operating current on the relay
operating time.
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A feature shall be incorporated to ensure instantaneous tripping in the event
that the circuit breaker is closed into a fault on a previously de-energised
line. This feature will be enabled by the absence of line voltage with an
appropriate time delay.
A monitoring system shall be provided to supervise the voltage transformer
supply to each distance relay. I the event of loss of one or more phases, the
monitoring system shall inhibit relay operation and initiate an alarm.
The distance relays shall incorporate indicators to show the zone in which the
relay tripped, the phases or phases faulted and whether operation was assisted
by a teleprotection signal. Indication must not be lost in event of a DC
auxiliary supply failure.
In addition to tripping contacts, the protection shall have, contacts for
initiating single pole and three pole auto-reclosing, fault locators, fault
recorders, signalling and alarms. The protection for the 220 kV feeder shall be
suitable for single pole tripping and for use in the single and three phase auto
reclosing scheme.
Where appropriate the protection and associated auto-reclose equipment shall
incorporated whatever means are necessary to ensure that all measuring and
starting elements in the healthy phases of the faulted line and all measuring
elements on the parallel circuit remain reset and are unaffected by the currents
which flow in the healthy phases and parallel circuit during the single phase
reclosure dead time. Additionally, the inter-phase fault measuring elements on
the faulted circuit shall be stable in the presence of a heavy close-up earth
fault. The methods used to ensure correct stability of healthy phase elements
during single phase dead times and during fault conditions shall in no way
prejudice the ability of the protection and auto-reclosing scheme to respond to
faults during the dead time and reclaim time in the manner described in Clause
14.5.
The distance protection scheme in permissive mode shall include an "echo"
feature to facilitate tripping of the local circuit breaker if a line fault
occurs when the remote end disconnector is open or the remote end distance relay
has not started. Suitable timers shall be included to prevent continuous carrier
send when the circuit breaker is open and to remove the "echo" signal after a
time, sufficient for tripping to occur, has elapsed.
The distance protection shall remain in service while the line disconnector is
open so as to afford instantaneous protection to the primary connections on the
busbar side of the line disconnector. For this purpose line disconnector
auxiliary switches shall be used to isolate the CVT connections to the distance
relay.
POWER SWING BLOCKING
The 220 kV distance relays shall incorporate power swing blocking Function
Function Characteristic, Power swing blocking shall encompass and be concentric
with the distance relay impedance starter or zone 3 characteristic. Similarly
where it is possible to shape the zone 3 or starter characteristic the power
swing blocking Function characteristic shall also be capable of similar shaping.
Where zone 3 is set reverse looking as directional mho, the power swing blocking
outer characteristic shall be capable of being set concentric with the zone 2
mho characteristic.
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Facilities shall be provided to block zones 1, 2 and 3 of the distance relay as
required.
Blocking logic shall be derived by determining the time taken for the apparent
impedance of the power swing locus to pass from the characteristic of the power
swing to the distance relay starter characteristic. Blocking shall not take
place until the apparent impedance has passed through the characteristics and
the time has expired.
The associated time delay relay shall have a setting range of 50 - 250 msecs.
The setting range of the power swing function characteristic angle shall at
least be adjustable over the same range as the distance relay zone 2 or zone 3
characteristic.
Reset times shall be short to ensure the distance relay reverts to its normal
role as soon as possible following a power swing.
Power swing blocking shall be inhibited if an earth fault occurs during a power
swing.
If the associated VT supplies are lost due to VT failure the power swing
blocking Function shall not operate.
DIRECTIONAL EARTH FAULT RELAY
To achieve discriminate clearance of high resistance earth faults, the distance
protection specified in Clause 14.4.1 shall be supplemented by an in-built
directional earth fault [DEF] function operating in conjunction with
teleprotection channels over multiplexed fibre optic links in a permissive
overreaching transfer trip of blocking mode selectable on site. At 220 kV, the
two DEF relays shall preferably be provided by different manufacturers.
The protection shall utilise different teleprotection channels to the distance
protection specified in Clause 14.4.1.
DEF relays shall be polarised by zero sequence voltage. The relay sensitivity
shall be adjustable between approximately 5 and 20% rated current. A relay
characteristic angle of 60 degrees is preferred but alternative angles will be
considered.
To prevent maloperation under current reversal conditions, during fault
clearance on the parallel circuit, the scheme shall include time delay relays or
other suitable means.
An adjustable time delay relay shall be provided to allow distance protection to
operate before the DEF relay for earth faults having values of arc resistance
which lie with the relay Zone 1 characteristic. A further time delay adjustable
from 0-10 seconds shall be provided to enable the relay to provide remote
back-up protection for high resistance faults independently of carrier
equipment. Auto reclosing shall be blocked in this case. It shall be possible to
selectively enable to disable the DEF Back-up function.
The DEF scheme in permissive mode shall include an "echo" feature to facilitate
tripping of the local circuit breaker if a line fault occurs when the remote end
disconnector is open or when the remote end DEF function has not started.
Suitable timers shall be included to prevent continuous carrier send when the
circuit breaker is open and to remove the "echo"
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signal after a timer, sufficient for tripping to occur, has elapsed. The echo
signal shall not be initiated by a single pole trip.
Selection facilities are required to either block or allow initiation of three
pole delayed auto reclose as desired.
14.5 220 kV AUTOMATIC RECLOSING
Three pole and/or single pole, single shot repetitive auto-reclosing equipment
shall be provided for 220 kV overhead line circuit breakers.
The scheme shall be specifically designed for substation layouts in which two
circuit breakers are associated with a single line end. Suitable logic shall be
included to enable the scheme to function as specified if one of the associated
circuit breakers is inoperable for any reason, and to prevent simultaneous three
pole reclosing of the circuit breakers.
Reclosure shall be initiated following tripping by the distance relay operating
in Zone 1 or in conjunction with teleprotection receive signal. Three pole
delayed auto-reclosing shall also be initiated by the directional earth fault
protection. Reclosure shall not be initiated in the event of a three phase
fault, nor any type of fault in the second or third back-up zones, nor when a
direct overtripping signal is received, nor when the circuit breaker is closed
onto a fault on a previously de-energized line. The following modes of operation
shall be selectable by means of a switch or switches:
(a) Single pole, high speed, auto-reclose. Auto-reclose shall be only initiated
in the event of a single phase to earth fault. All other types of faults shall
result in three phase tripping without auto-reclosing.
(b) Three pole delayed reclosing. Delayed reclosing shall only be initiated in
the event of a single phase or two phase fault. Three phase faults shall result
in tripping without auto-reclosing.
(c) Single pole, high speed and/or three phase delayed, auto-reclosing as
appropriate. Single pole, high speed auto-reclosing shall be initiated only in
the event of a single phase-earth fault and delayed reclosing initiated in the
event of a two phase fault. Three phase tripping without re-closing shall rake
place for three phase faults.
(d) No auto reclosing. Three phase tripping without auto-reclose shall take
place for any type of fault.
If a second earth fault occurs during the single pole auto-reclose dead time,
three phase tripping with subsequent delayed three pole auto-reclose shall take
place. If the auto-reclose selector switch is in the single pole reclose mode,
three phase tripping with lockout should follow.
The high speed and delayed reclosing dead times have to be co-ordinated with the
equipment being provided at the remote substation. Tentative ranges are as
follows:
High speed single pole reclose dead time - 0.3 to 3 seconds
Delayed three pole reclose dead time - 3 to 30 seconds
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The reclaim time i.e. the time period following the automatic reclosing of the
circuit breaker, during which further faults result in three phase tripping and
lockout, shall be chosen to match the duty cycle of the circuit-breakers,
assuming the shortest available dead time is chosen. The reclaim time shall not,
however, be less than five seconds, and the reclaim time range shall extend to
180 seconds. (The reclaim time commences at the instant the reclose command is
given to the circuit breaker and, therefore, includes the circuit breaker
closing time).
The closing command shall be limited to two seconds, after which time the
reclosing equipment shall be automatically reset without resetting the reclaim
timer. The reclosing equipment shall also reset if dead line check or
synchronism check conditions are not satisfied within a predetermined time of
the check relays being energized.
A counter shall be provided to record the number of reclosures.
Reclosing schemes shall include voltage monitoring and check synchronising
relays as appropriate.
For dead line charging, voltage monitoring relays shall check the condition of
the line and busbar and permit three pole reclosing only when the line is
de-energised and the busbar is energised. The line is considered to be
de-energised when the voltage is less than twenty percent of rated voltage, and
the busbar is considered to be energised when the voltage is greater than eighty
percent of rated voltage.
(A signal shall be provided from the dead line check relays for interlocking of
the line earth switches to prevent the switches being closed onto a live line).
When a voltage is present on both sides of a circuit breaker, the synchronism
check relay shall monitor the magnitudes of the two voltages across the open
circuit breaker and the phase angle and slip frequency between these voltages.
Closing shall only be permitted when these are within prescribed limits.
Check synchronising relays shall comply with the requirements of Clause 14.2.
The same relays may be used as for manual closing.
14.6 BACK-UP OVERCURRENT
Inverse definite minimum time overcurrent and/or earth fault relays shall be
provided where specified. They shall be of Numeric type and shall have a
standard inverse characteristic according to IEC 60255.
Relays should have adjustable settings for both operating current and time, the
design of the relay being such that the setting adjustments can be carried out
on load without taking the relay out of service. The range of current settings
for phase faults shall be 50-200 per cent of rated current with tappings no
longer than 25 per cent intervals and the time multiplier setting shall be in
steps of 0.025.
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The relays shall be thermally rated such that the operating time of the relay at
the highest practical current levels on any combination of current and time
multiplier settings shall not exceed the thermal withstand time of the relay.
14.7 BREAKER FAILURE PROTECTION
Breaker failure protection shall be included for the 220 kV circuit breaker.
The breaker failure protection on a circuit breaker shall be initiated by all
the other protection devices which normally initiate tripping of that breaker.
In the event of the circuit breaker failing to open within a pre-selected time,
the breaker failure protection shall instigate tripping of all adjacent circuit
breakers. It shall also incorporate provision for initiating tripping of any
remote infeeds, via teleprotection channels over fibre optical communication
Links, as appropriate.
The position of each circuit breaker shall be monitored by two sets of current
relays fed from the back-up protection current transformers. The relay outputs
shall be connected in series in a "two out of two" arrangement. The relays shall
have an operating time of approximately 10 msecs, and a consistent rest time of
less than 15 msecs. The relays shall be capable of remaining in the operated
position continuously and carrying twice the circuit rated current continuously.
The operating time of the breaker failure protection shall be selected by means
of timers with ranges of 50 to 500 msecs. There shall be two timers per circuit
breaker. The timer tripping outputs shall be connected in a "two out of two"
arrangement and shall energise both tripping coils of the adjacent circuit
breakers. The timers shall be of static numeric design to minimise our travel.
The circuit Breaker Failure Protection Relay or Scheme employed shall be able to
employ both the Current Check and the Circuit Breaker Closed Status Criterion
for correct operation of the Circuit Breaker Failure Protection.
Initiation and Tripping of the Circuit Breaker Failure Protection shall be
interlocked with the Circuit Breaker busbar disconnectors and the 220 kV Power
Transformer Isolator. The Circuit Breaker Failure Protection Contacts for
Tripping and initiating Breaker failure schemes for adjacent as well as remote
Circuit Breakers shall be self reset. Circuit Breaker Lock-out Relays shall
however be electrically reset.
Incoming Breaker Failure Direct Inter-tripping commands from the remote
substation shall be interlocked with the status of the bay disconnector. The
D.T.T. command shall not trip the circuit breakers if the bay disconnector is in
open position.
14.8 DISTURBANCE RECORDER AND FAULT LOCATOR
The 220 kV feeder shall be monitored by a disturbance recorder to record
graphically the currents and voltages during fault conditions as well as the
operation of protective relays.
The following facilities should be provided:
[a] Analogue channels to record voltages and currents.
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[b] Digital channels to record chronologically relay operations.
[c] Alarm contacts to indicate "disturbance recorder operating" and
"disturbance recorder failure" in the Control Room.
[d] Pushbutton to manually initiate recording of currents and voltages as
well as the digital signals.
[e] Memory for recording currents and voltages ten cycles prior to the
occurrence of the fault.
[f] Provision to adjust the recording period to cover a
trip-autoreclose-trip cycle.
[g] Device which records the precise time of the occurrence of the fault to
the nearest milli-second.
The disturbance recorder shall be a numerical device and shall have adequate
memory to store a large number of events.
The memory capacity supplied shall equal what is generally available in the
market at the time of tender from leading manufacturers of disturbance
recorders.
FAULT LOCATION:
The disturbance reorder shall be a distance to Fault Location Facility. The
distance to fault shall be displayed in kilometres of line length on the
Disturbance Recorder LCD Display.
14.9 TRIPPING RELAYS
A Self reset Trip Relay shall be provided for each phase. This shall be of the
heavy duty type suitable for panel mounting.
A Lockout, Electrically reset Trip relay shall be provided for the line
protection.
Relay operating time shall not exceed 10 ms from initiation of trip relay
operating coil to contact close.
14.10 AUXILIARY VOLTAGE OPERATING RANGE
DC relays, coils, elements, etc. will be operated from a 110 V rated DC battery,
which under float charging conditions operates at 120 volts. DC operated relays,
coils, elements, etc. shall be suitable for operation over a voltage range of
121 to 88 volts i.e. 110V-20% +10%.
14.11 PROTECTION SETTINGS
Relay settings for all unit type protective schemes and for distance relay shall
be submitted to KPLC prior to commissioning of the Olkaria III substation and
Transmission Interconnector for approval. Settings shall also be provided for
those relays and other equipment provided under this Section of the Contract
which do not require an intimate knowledge of existing relay settings e.g.
circuit breaker fail relays. Details calculations shall be provided supporting
the recommended settings.
The back Overcurrent and Earth Fault Relays shall be set using Normal Inverse
Time-Current characteristics for IEC 60255 or BS 142. The Relay shall be set to
ensure coordination with other relays existing at Olkaria II substation.
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14.12 220 kV CONTROL PANEL
One panel shall be installed at Olkaria III Control room. The control panels
shall be equipped with the following equipments and devices:
A mimic of the Switchyard design incorporating the following:
Illuminating discrepancy control switches for circuit breaker and motorised
disconnector. Semaphore indicators for the hand operated disconnector and Line
Earth switch.
Override/On/Off key selector switch for the 220 kV Circuit Breaker.
Control selector switch for Supervisory/Remote control of circuit breaker and
motorised disconnector.
Multi-way alarm Annunciator Relay, complete with accept, reset and lamp
facilities. The Annunciator Relay shall provide for all alarms required for the
220 kV Line Protection.
Instruments for 220 kV Line
MW meter:
MV Ar meter:
Ammeter:
Voltmeter with selector switch.
14.13 PROTECTION RELAY PANELS
Three Protection panels shall be provided as follows:
Main 1 Protection
Main 2 Protection and Back-up Protection
Circuit Breaker Failure Protection and Autoreclose Relay. Trip Relays and Trip
Circuit Supervisory to be located in this panel.
110 V DC CHARGER AND BATTERIES
Duplicate sets (A & B) of 110 V DC Charger and batteries shall be provided and
installed in Olkaria III Control Room.
The Charger and Batteries shall be appropriately rated for the required
Protection and Control duties. Distribution Board with appropriate switchgear
shall be provided.
48 V DC CHARGER AND BATTERIES
Duplicate sets (A & B) of 48 V DC Charger and batteries shall be provided and
installed in Olkaria III Control Room.
The Charger and Batteries shall be appropriately rated for the required
communication duties. A distribution Board with appropriate switchgear shall be
provided.
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415 V AC AUXILIARY SUPPLY
415 V AC Distribution Board shall be provided at Olkaria III with adequate
outlets for the required applications
Two sources shall be connected to the Board through an Automatic Change-over
system.
Intentionally blank
14.14 OPGW, COMMUNICATION EQUIPMENT AND SCADA REQUIREMENTS
This section covers the Summary of Supply and Installation of communications,
telephones, tele-protection and SCADA equipment for the efficient supervision,
control, operation and maintenance of the transmission system.
COMMUNICATION SYSTEM
Optical fibre communication link is required from Olkaria III substation to
Olkaria II substation. At Olkaria II it shall be integrated by KPLC into the
existing communication System to Nairobi North and to the National Control
Centre.
The optical fibres shall be optical ground wire (OPGW) to be installed on the
220 kV Interconnector from Olkaria III to Existing Olkaria II Substation.
The system shall consist of 12-Fibre, dual window single mode fibre in
accordance with the ITU (T) recommendations OPGW over the transmission line
route.
SDH STM-1 optical terminal equipment
Communication equipment of Olkaria II end will be located in existing Olkaria II
substation control room.
SDH STM-1 multiplexing equipment providing protection. SCADA and voice
communications, including all necessary interface cards. This will provide for
new protection. SCADA and voice signals installed under this project as well as
any existing services which the client required to be carried on the optical
fibre.
Lead in cable at Olkaria III Substation connecting the PGW to the terminal
equipment.
DC power supplies by KPLC and OrPower 4 each at its side.
Spare fibres will be terminated in the building in such a way as to facilitate
their future use.
TERMINAL EQUIPMENT
The terminal equipment for the Fibre Optical Communication link shall be
installed at Olkaria III substation. This shall allow connection of Data for
SCADA, Speech and Teleprotection Signals to Olkaria II substation. This
equipment shall match the Interface Equipment at Olkaria II to allow integration
by KPLC into the existing communication system at Olkaria II and hence to
National Control Centre located at Juja Rd Substation in Nairobi, to provide
mounted in enclosed buildings at Olkaria III. No intermediate repeaters will be
used.
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LINE DIFFERENTIAL PROTECTION
This will use dedicated fibres.
SPEECH EQUIPMENT
A PABX exchange equipment already existing at Olkaria II. It's proposed to
connect two extensions from this exchange to Olkaria III substation through the
proposed communication link. However in case the equipment at Olkaria II
requires expansion to accommodate the additional telephone extension, this shall
be carried out by KPLC. Seller shall provide the telephone sets at Olkaria III.
REMOTE TERMINAL UNITS
A Remote Terminal Unit RTU shall be installed at Olkaria III Substation for
purposes of Supervisory or the Substation as well as the control of the
substation Equipment.
The Philosophy of Status, Alarms, Control and Measurements connected to SCADA
i.e. type and Numbers shall be followed, and mutually agreed by the parties.
The RTU shall be microprocessor bases and capable of handling all the facilities
at Olkaria III Power Station and Substation.
All status inputs whether events or alarms of at leas 20 milliseconds duration
must be captured and no power system data lost. The RTUs supplied must be
totally compatible, and capable of being integrated with the existing system.
The new RTU supplied under this contract shall support multiple protocols. As a
minimum requirements, they shall fully support the protocol used by the existing
SINDAC RTUs and also the IEC ▇▇▇-▇-▇▇▇ protocol to enable them to be connected
to a different master station in the future.
The Seller shall state all the protocols supported by the RTU they propose to
install and the means by which the protocol used by the RTU can be changed at a
later date.
In the event of loss of dc to the RTU, internal battery back-up shall be
required to maintain any volatile memory for several hours. However for system
that require reloading of the RTU memory for whatever reason the procedure
should be simple without the need for sophisticated loading or test equipment.
For the purposes of RTU testing, self diagnosing facilities should be
incorporated and visual indication, by means of light emitting diodes (LEDs), of
fault conditions shall be required.
A SCADA interface Marshalling cubicle shall be supplied to interface all power
system data i.e. status indication alarms, analogues, interposing relays for
control outputs, etc. to the RTU. This cubicle shall also house transducers for
analogue inputs and interposing relays for control outputs.
48 volts DC power supplies shall be supplied to power the RTU, interposing
relays, telephones equipment.
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SCOPE OF WORK
The contractor shall include detailed system design, manufacture, supply,
installation, testing, commissioning, remedying of defects, maintaining the
works during the defects liability period and any incidental work necessary for
the proper completion of the work in accordance with this contract.
Detailed requirements are as follows:
System design - the system design and preparation of contractor's drawings to
approval of the Engineer
Supply and installation of fibre optic lead-in cables including mounting
hardware and splicing
Supply and installation of lead in cables to the equipment terminals.
Supply and installation of fibre optic terminal and multiplexing
Supply and installation of supervisory management system and cabling to the
relevant distribution frame(s)
Supply and installation of DC power supplies in Olkaria III only.
Factory testing of the terminal equipment and supervisory prior to delivery of
OrPower 4 supplied equipment.
Testing and commissioning of the systems up to the terminal equipment in Olkaria
II.
Multiplexed signals for permissive and direct inter-trips for the 220 kV
circuits.
CONTROL ROOM
A Control Room shall be constructed to house Protection and Control panels as
well as communications equipment and Auxiliary supply equipment belonging to
KPLC.
The Control Room shall have the following areas:
Protection Panels area
Communication equipment area
110 V & 48 V DC Charger area
110 V & 48 V DC Battery area
The designated areas shall be approximately sized to accommodate the respective
equipments.
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PART D: METERING EQUIPMENT
1. METERING SYSTEM
(a) KPLC shall, at its expense, procure and provide to the Seller the
back-up metering equipment (the "Back-Up Metering Equipment") for the
Early Generation Facility and the Plant, and the Seller shall install
the same for KPLC and once the Seller has installed the system KPLC
shall own and maintain it. The Seller shall, at its expense, procure,
install, own and maintain the principal metering equipment (the "Main
Metering Equipment") for the Early Generation Facility and the Plant.
(b) KPLC shall provide and install a strip chart recorder and shall make a
continuous recording of the Net Electrical Output and Reactive Power.
Such Net Electrical Output and Reactive Power shall be recorded on
appropriate magnetic media or equivalent, which recording shall be used
to compute adjustments to the Capacity Payments as provided by Schedule
5. Upon installation, such strip chart recorder shall constitute a part
of the Metering System.
(c) The metering points to record the MWh and Mvarh exchange between the
Seller and KPLC shall be shown on Figures 3 and 4. The current and
voltage transformers will measure current and voltage on the outgoing
high voltage terminals of the step-up transformer of the Early
Generation Facility and of the step-up transformers of the Plant. Where
the Early Generation Facility does not have step up transformers then
the current and voltage transformers will be located as close to the
Interconnection Point as possible. The meters owned by KPLC will be
located within the switchyard in a building housing all marshalling
cubicles, control and metering panels and communication equipment. Any
photographic facilities will be provided by the Seller as part of the
verification process for monthly meter readings.
(d) The Main Metering Equipment and the Back-Up Metering Equipment
(collectively called the Metering System) shall be to a mutually agreed
international standard providing a measured accuracy of +/- 0.2% for
each individual component.
2. INSTALLATION OF METERING SYSTEM
(a) Subject to Section 2(b), the Seller shall, at its expense, install the
Metering System on the Early Generation Site and the Site at locations
to be agreed upon by the Parties, and upon completion convey to KPLC all
right, title and interest in the Back-Up Metering Equipment free of all
charges and encumbrances. Prior to the installation by the Seller of the
Metering System, the Seller will deliver to KPLC the protection scheme
and the metering plan of the Early Generation Facility and the Plant for
KPLC's approval. KPLC will provide written comments on the protection
scheme and the metering plan within thirty (30) days of their receipt.
The Seller will incorporate KPLC's comments received during such thirty
(30) day period into the protection scheme and the metering plan and
deliver final copies to KPLC. KPLC will approve the final scheme and
plan within fifteen (15) days or notify the Seller that it does not
approve the scheme and plan, giving its reasons therefor. If KPLC does
not give reasons for not approving the scheme and plan within such
fifteen (15) day period, KPLC shall be deemed to have approved such
scheme and plan. Upon
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approval by KPLC, the Seller will complete the design and commence
installation of the Metering System. Such installation shall be
completed not later than fifteen (15) days prior to the scheduled date
to begin initial testing of the Early Generation Facility or the Plant.
The Seller shall provide KPLC with thirty (30) days advance notice of,
and KPLC shall have the right to observe and inspect, the installation
of the Metering System. KPLC shall be notified not less than fifteen
(15) days prior to, and shall have the right to observe, the
installation of the Back-up Metering Equipment by the Seller.
(b) If the Back-up Metering Equipment is not provided to the Seller by KPLC,
at a reasonable time taking into account the Construction Programme,
then KPLC shall reimburse the Seller for all reasonable expenses
incurred by the Seller for the acquisition of the Back-up Metering
Equipment. Together with an invoice for reimbursement, the Seller shall
provide reasonable documentation of the expenses incurred for the
purchase of the Back-up Metering Equipment. Payment shall be due along
with the first scheduled payment made pursuant to Clause 11.
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PART E: DELIVERY POINT
The Delivery Point for the Early Generation Facility is at the early generation
33 kV generating bus as shown on Figure 3.
The delivery point for the Plant is the OrPower side of the Line Disconnector
LD-3 as shown on Figure 4.
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PART F: RATED CAPACITY
The Rated Capacity of the Plant and of each Unit shall be:
Capacity in MW (at reference conditions
(see Note (1)), measured by the Metering System) Comments
------------------------------------------------ --------
Plant 48.0
Unit Number
Unit 1 4.0 Note (2)
Unit 2 4.0 Note (2)
Unit 3 3.0 Note (2)
Unit 4 12.33
▇▇▇▇ ▇ 12.33
▇▇▇▇ ▇ 12.33
Notes:
1. Reference Conditions are specified in Part A of Schedule 2.
2. Already tested as part of the Early Generation Facility.
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FIGURE 1
GENERAL MAP OF THE AREA
(See Page ____)
100
FIGURE 2
MAP SHOWING LICENCE AREA
(See Page ____)
101
FIGURE 3
EARLY GENERATION FACILITY DRAWINGS
(See Page ____)
102
FIGURE 4
PLANT DRAWING
(See Page ____)
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SCHEDULE 3: MAINTENANCE ALLOWANCES OF THE EARLY GENERATION FACILITY AND THE
PLANT
Early Generation Facility (at 12 MW) Plant (at 48 MW)
--------------------------------------------- ---------------------------------------------
Contract Contracted Annual Scheduled Contract Contracted Annual Scheduled
Year Capacity Maintenance Allowance Year Capacity Maintenance Allowance
(kW) EGSMA (kWh) (kW) SMA (kWh)
-------- ---------- --------------------- -------- ---------- ---------------------
1 12,000 2,016,000 1 48,000 8,410,000
2 12,000 2,016,000 2 48,000 8,410,000
3 12,000 2,016,000 3 48,000 8,410,000
4 12,000 2,016,000 4 48,000 8,410,000
5 12,000 2,016,000 5 48,000 8,410,000
6 12,000 2,016,000 6 48,000 8,410,000
7 12,000 2,016,000 7 48,000 8,410,000
8 12,000 2,016,000 8 48,000 8,410,000
9 12,000 2,016,000 9 48,000 8,410,000
10 12,000 2,016,000 10 48,000 8,410,000
11 12,000 2,016,000 11 48,000 8,410,000
12 12,000 2,016,000 12 48,000 8,410,000
13 12,000 2,016,000 13 48,000 8,410,000
14 12,000 2,016,000 14 48,000 8,410,000
15 12,000 2,016,000 15 48,000 8,410,000
15 12,000 2,016,000 15 48,000 8,410,000
17 12,000 2,016,000 17 48,000 8,410,000
18 12,000 2,016,000 18 48,000 8,410,000
19 12,000 2,016,000 19 48,000 8,410,000
20 12,000 2,016,000 20 48,000 8,410,000
The Contracted Plant Capacity is the result of the Appraisal Works.
The Annual Scheduled Maintenance Allowance for the Early Generation Facility and
for the Plant, EGSMA and SMA, set forth in this Schedule shall be converted into
a Scheduled Maintenance Allowance for each month, EGSMA(p) and SMA(p), during
such Contract Year using the planned maintenance programme notified by the
Seller to KPLC in accordance with
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Clause 9.3 of this Agreement such that the total of monthly allowances for such
Contract Year will equal the Annual Scheduled Maintenance Allowance for such
Contract Year. The Scheduled Maintenance Allowance for each month shall be used
in the calculation of the Capacity Payment for such month in accordance with
Schedule 5. The Annual Outage Allowance for the Early Generation Facility (EGOA)
shall be set as zero point zero eight (0.08) or eight percent (8%), and the
Annual Outage Allowance for the Plant shall be set as zero point zero four
(0.04) or four percent (4%). This shall be used in the calculation of
Unscheduled Maintenance Allowance as set out in Schedule 5.
For the Early Generation the Contract Year 1 starts at the Early Generation
Commercial Operation Date and for the Plant the Contract Year 1 starts at the
Full Commercial Operation Date.
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SCHEDULE 4: PROCEDURES
PART A: COMMISSIONING AND TESTING PROCEDURES
1. TESTS PRIOR TO SYNCHRONISATION OF EACH UNIT
Prior to the first synchronisation of each Unit and again after the installation
of the Early Generation Facility Units at the Plant Site, the Seller shall carry
out the following tests:
(a) automatic voltage regulator setting and adjusting in stand-still
condition and with the generator running at no load;
(b) turbine governor control checks, including an overspeed test;
(c) functional testing and timing of high voltage switchgear in the
switchyard of the Early Generation Facility and the Plant; and
(d) the Seller and KPLC shall verify that all protection level settings are
as agreed, and shall complete injection tests to verify the operation of
the protection relays, equipment and switchgear.
Where the Site and Temporary Site are at the same place and the Units of the
Early Generation Facility have not been disturbed during the installation of the
Plant then the Units of the Early Generation Facility shall not be required to
repeat the Unit Commercial Operations Tests.
2. TESTS AFTER SYNCHRONISATION OF EACH UNIT AND UNIT COMMERCIAL OPERATIONS
TESTS
(a) After first synchronising each Unit, initial operational testing of each
Unit shall be conducted by the Seller. Once the Seller is satisfied that
each Unit is capable of continued reliable operation, the Seller shall
so notify KPLC in accordance with Clause 7 of this Agreement and carry
out the following tests (the "Unit Commercial Operations Tests"), which
if the Unit satisfies the minimum performance criteria therefore, will
result in the Unit having satisfied that test.
(i) Capacity Demonstration Test;
(ii) turbine governor operation;
(iii) reactive capability;
(iv) minimum load capability;
(v) response of plant to step load changes.
(b) Minimum performance criteria for the Unit Commercial Operations Tests
are set out below.
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(i) CAPACITY DEMONSTRATION TEST.
During the period of the Capacity Demonstration Test, the capacity of the Unit
will be demonstrated in the Demonstration Test, the capacity of the Unit will be
demonstrated in the following manner:
o the Unit shall be in operation at Rated Capacity with normal
auxiliaries and Geothermal Reservoir load;
o the Seller will declare to KPLC the commencement of the test and
will record the reading of the Metering System;
o the test duration will be six (6) hours and at the end of this
period the Seller will record the new reading of the Metering
System. The Capacity as determined by such test shall be the
difference between the reading taken at the end of the sic (6)
hour period and the reading taken at the beginning of such period,
divided by six (6); provided, that the Capacity shall not be
considered to have been established unless the result of such
determination is equal to or greater than the minimum criteria for
such test set forth below.
During Commissioning and the Operating Period the Capacity will be determined by
measuring the output at the outgoing busbars of the Unit through the Metering
System. Tests will be based on relevant American Society of Mechanical Engineers
standard ASME power test codes and IEC standards using plant instrumentation and
the Metering System. Test results shall be corrected to the "Reference
Conditions", specified in Schedule 2, Part A using the correction curves from
Figure 5 attached to this Schedule.
The Unit will have satisfied this test if it is demonstrated that the Capacity
of the Unit is greater than 70% of the Rated Capacity of each Unit at the date
of this Agreement provided that if at least 90% of Rated Capacity has not been
achieved within three (3) months of the date of the test, the Unit shall be
deemed to have failed the Capacity Demonstration Test and the Seller shall not
be entitled to receive any further Capacity Payments until the Unit achieves at
least 90% of the Rated Capacity at the date of this Agreement.
(ii) TURBINE GOVERNOR OPERATION
The operation of each turbine will be demonstrated over the range of ninety five
percent (95%) to one hundred and five percent (105%) of rated speed.
(iii) REACTIVE CAPACITY
Tests will demonstrate the capability of the Units to operate stably at rated
voltage and frequency at power factors and under reactive conditions as follows:
100% output 0.95 Leading Power Factor
100% output 0.85 Lagging Power Factor
The Unit shall meet the manufacturer's published curves at zero load.
107
(iv) MINIMUM LOAD TESTS
Each Unit shall prove its capability to operate stably at fifty percent (50%) of
the Capacity demonstrated in its Capacity Demonstration Test for a period of one
(1) hour with all other Units shut down and all normal auxiliaries in operation.
(v) STEP LOAD CHANGE TESTS
Each Unit shall undergo a test which demonstrates in capability to change load
in steps of up to 10% of operating load. At the start of each test the Unit
shall be operated at approximately 50% of maximum output for a continuous period
of five (5) minutes. The load shall be increased to 55% in one step. The unit
shall have passed the test if it immediately responds to the change in load and
maintains 55% load for a further five (5) minutes.
3. EARLY GENERATION FACILITY AND PLANT COMMERCIAL OPERATIONS TESTS
(a) Following satisfactory completion of the Unit Commercial Operations
Tests for all Units, the Seller shall carry out on the Early Generation
Facility or the Plant the Early Generation Commercial Operations Tests
or the Plant Commercial Operations Tests as the case may be. The Seller
shall notify KPLC of its intention to carry out such tests in accordance
with Clause 7 which, if the Early Generation Facility or the Plant as
the case may be satisfies the minimum performance criteria thereof, will
result in the Early Generation Facility or the Pant as the case may be
having satisfied that test. These tests are:
(i) Contracted Capacity Test;
(ii) Reliability Run Test;
(iii) Unit Trip Test;
(iv) Standby Supplies Test; and
(v) Environmental Tests.
(b) The minimum performance criteria for the Early Generation Commercial
Operations Tests or the Plant Commercial Operations Tests as the case
may be are:
(i) RELIABILITY RUN AND CONTRACTED CAPACITY
Upon completion of the Reliability Run Test prerequisites as included below the
Seller shall declare to KPLC the commencement of the Reliability Run Test.
During the period of the Reliability Run Test, the Contracted Capacity of the
Early Generation Facility or the Plant as the case may be will be determined in
the following manner:
o The Early Generation Facility or the Plant as the case may be
shall be in operation in full output with normal auxiliaries and
Geothermal Reservoir load;
o The Seller will declare to KPLC the commencement of the test and
will record the reading of the Metering System;
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o The test duration will be six (6) hours and at the end of this
period the Seller will record the new reading of the Metering
System. The Capacity as determined by such test shall be the
difference between the reading taken at the end of the six (6)
hour period and the reading taken at the beginning of such period,
divided by six (6); provided, that the Contracted Capacity shall
not be considered to have been established unless the result of
such determination is equal to or greater than the minimum
criteria, corrected to "Reference Conditions" for such test as set
forth below:
(ii) CONTRACTED CAPACITY
During Commissioning and commercial operations the Contracted Early Generation
Capacity or Contracted Plant Capacity will be determined by measuring the output
at the Metering Point of the Early Generation Facility or the Plant as the case
may be through the Metering System. Tests will be based on relevant American
Society of Mechanical Engineers standard ASME power test codes and IEC standards
using plant instrumentation and the Metering System. Test results shall be
corrected to the "Reference Conditions" specified in Schedule 2, Part A using
the correction curves from Figure 5 attached to this Schedule.
In the event the Contracted Early Generation Capacity Test carried out during
Commissioning to enable the Early Generation Commercial Operation Date to occur
demonstrates that the Contracted Early Generation Capacity is greater than
ninety five percent (95%) but less than one hundred percent (100%) of the amount
shown as the Early Generation Facility Contracted Capacity at the date of this
Agreement then the Contracted Capacity shall be adjusted to such lesser amount.
In the event the Contracted Plant Capacity Test carried out during Commissioning
to enable the Full Commercial Operation Date to occur demonstrates that the
Contracted Plant Capacity is greater than seventy per cent (70%) but less than
one hundred percent (100%) of the amount agreed or determined by the Parties
pursuant to Clause 5, the Contracted Plant Capacity shall be adjusted to such
lesser amount provided that if at least 90% of Rated Capacity has not been
achieved within three (3) months of the date of the test, the Plant shall be
deemed to have failed the Contracted Plant Capacity Test and the Seller shall
not be entitled to receive any further Capacity Payments until the Plant
achieves at least 90% of the Rated Capacity agreed or determined pursuant to
Clause 5.
(iii) RELIABILITY RUN
A reliability run for the Early Generation Facility or the Plant as the case may
be will be carried out as part of the Commissioning tests. The run will be for a
period of thirty (30) days and will include seventy-two (72) continuous hours at
one hundred percent (100%) base load (i.e. maximum continuous rating at the
prevailing ambient temperatures). The output during the remaining hours of the
test will be as requested by KPLC in accordance with Clause 8.3. The test shall
have been satisfactorily completed only if the Early Generation Facility or the
Plant as the case may be experiences no more than five events which prevent the
Early Generation Facility or the Plant as the case may be from delivering its
Contracted Capacity and no single event shall exceed five (5) hours. For the
purposes of this clause only a condition on KPLC's System which restricts
delivery of electrical energy from the Early Generation Facility or the Plant as
the case may be shall not be considered one of the five (5)
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allowable events. Test results shall be corrected to the "Reference Conditions",
specified in Schedule 2, Part A using the correction curves from Figure 5
attached to this Schedule.
(iv) UNIT TRIP TEST
Tests shall demonstrate the ability of the Early Generation Facility or the
Plant as the case may be to withstand the simultaneous disconnection from the
KPLC System of the largest two (2) Units, operating at greater than ninety five
per cent (95%) of the capacity demonstrated in each Unit's Capacity
Demonstration Test, and to continue to operate in a safe manner. Each Unit shall
demonstrate that it is Capable of re-synchronisation within thirty (30) minutes.
(v) STANDBY SUPPLIES TEST
With all Units shut down in either the Early Generation Facility or the Plant as
the case may be the Early Generation Facility or the Plant shall be disconnected
from the KPLC's System for six (6) hours.
The standby power supplies, as specified in paragraph 4.3(d) of Part A of
Schedule 2, shall maintain the Early Generation Facility in such a state
throughout the period of disconnection from the KPLC System that a binary energy
converter Unit can be synchronised within one (1) hour of reconnection to KPLC's
System. At the end of the disconnection period the Seller, with the agreement of
KPLC, shall re-synchronise the Early Generation Facility.
In the case of the Plant the standby power supplies, as specified in paragraph
4.3(d) of Part A of Schedule 2, shall maintain the Plant in such a state
throughout the period of disconnection from the KPLC System that a binary energy
converter Unit can be synchronised within one (1) hour of reconnection to KPLC's
System. At the end of the disconnection period the Seller, with the agreement of
KPLC, shall re-synchronise at least one )1) binary energy converter Unit and one
(1) steam turbine Unit.
(vi) ENVIRONMENTAL TESTS
The Seller shall complete whatever tests are necessary to demonstrate compliance
with the Environmental Conditions as specified in paragraph 1.2 of Part A of
Schedule 2.
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PART B: METER PROCEDURES
1. TESTING OF METERING SYSTEM
(a) KPLC shall initially test the Metering System for accuracy in accordance
with this Schedule 4 by the later of fifteen (15) days after it is
installed by the Seller or five (5) days prior to the date scheduled for
initial testing of the Early Generation Facility or the Plant as the
case may be to begin, and thereafter at intervals of not less than one
hundred and eighty (180) days after giving the Seller no less than
forty-eight (48) hours advance notice. The Seller may have a
representative present during any such testing, as well as during any
inspection of the Metering System or adjustment thereof.
(b) KPLC shall also test the Metering System at any other time reasonably
requested by the Seller, such additional testing to be at the Seller's
expense unless the test indicates that the Metering System is inaccurate
by more than one-half percent (0.5%), in which case KPLC shall bear the
cost of the additional test. The Seller may have a representative
present during any such testing, as well as during any inspection of the
Metering System or adjustment thereof.
(c) When on the Site, KPLC shall comply with all reasonable instructions of
the Seller and, notwithstanding any other provision in this Agreement to
the contrary, shall indemnify and hold the Seller harmless from any loss
or damage sustained by virtue of KPLC's negligence or wilful misconduct
in the performance of its obligations but only to the extent that such
loss or damage is not covered by insurance of the Seller.
(d) The calibration of meters will be checked to ensure that the accuracy
remains within the specified limits.
The method of calibration and frequency of tests will be agreed between
the Seller, and KPLC based on knowledge of the performance and the
design of the installed meters and the manufacturers' recommendations.
(e) Compensation will be made for the errors of current and voltage
transformers in the meter calibration or during the computation of
records. Current and voltage transformers will be tested for ratio and
phase angle errors following manufacture at an accredited testing
station in the presence of representatives from the Seller; and KPLC.
Test certificates issued by the testing station will be issued
independently to both parties.
(f) Testing and calibration of the Metering System shall be carried out by
KPLC after giving appropriate notice to the Seller, in line with the
agreed frequency of testing or in the event of either Party having
reasonable cause to believe the meters are outside specified limits.
During such tests and calibration the Seller shall have the right to
have a representative present at all times.
111
2. READING OF METERS
(a) PROCEDURES: The Metering System shall be read monthly on the last
business day of each month (or such other day as may be agreed upon by
the Parties) for the purpose of determining the Net Electrical Output of
the Early Generation Facility or the Plant as the case may be since the
preceding reading. The Seller shall read the Metering System during the
normal business hours and the Seller shall give KPLC at least
forty-eight (48) hours notice of the time the Seller shall read the
Metering System. In the event that a KPLC representative is present at
such reading of the Metering System for the purpose of measuring Net
Electrical Output, then such reading shall be jointly taken and
recorded.
Under normal circumstances the readings of the Main Metering Equipment
shall be used to determine the amount of Net Electrical Output delivered
by the Seller in any Period.
In the event that a KPLC representative is not present at a reading of
Net Electrical Output, then the Seller's representative shall take and
record such reading and make a photographic record thereof. The Seller
shall maintain a log of all such meter readings. Measurements recorded
shall be delivered by the recording Party to the non-recording Party by
facsimile within forty-eight (48) hours after the readings are taken. In
the event that the Main Metering Equipment is not in service as a result
of maintenance, repairs or testing, then the best available information,
which may include the Back-Up Metering Equipment, shall be used during
that period.
(b) INACCURACIES IN METERING SYSTEM: When, as a result of any test of the
Metering System, the Metering System is found to be inaccurate by more
than one-half percent (0.5%) or is otherwise functioning improperly or
if any seal securing the Metering System is found broken, then the
correct amount of Net Electrical Output delivered to KPLC for the actual
period during which inaccurate measurements were made, if any, shall be
determined as follows:
(i) First, the readings of the Back-up Metering Equipment, if any, shall be
utilised to calculate the correct amount of Net Electrical Output,
unless a test of such Back-up Metering Equipment, as required by either
Party, reveals that the Back-up Metering Equipment is inaccurate by more
than one-half percent (0.5%), is otherwise functioning improperly or any
seal securing the Back-up Metering Equipment is found broken;
(ii) If there is no Back-up Metering Equipment or if the Back-up Metering
Equipment is found to be inaccurate by more than one-half percent
(0.5%), is otherwise functioning improperly or any seal securing the
Back-up Metering Equipment is found broken, then Seller and KPLC shall
jointly prepare an estimate of the correct reading on the basis of all
available information and such guidelines as may have been agreed to
between the Seller and KPLC;
(iii) In the event that KPLC and the Seller fail to agree upon an estimate for
the correct reading, KPLC shall make any payments to the Seller required
as a result of its estimate of the correct reading and the matter may be
referred by either party for determination by an Expert pursuant to
Clause 19; and
112
(iv) The difference between the previous payments by KPLC for the period of
inaccuracy and the recalculated amount shall be offset against or added
to the next payment to the Seller under this Agreement, as appropriate.
If the period of inaccuracy cannot be accurately determined, it shall be
deemed to have begun on the date which is midway between the date the
meter was found to be inaccurate and the date of the last meter reading
accepted by the Parties as accurate. In no event, however, shall any
such adjustment be made for any period prior to the date on which the
Metering System was last tested and found to be accurate within plus or
minus one-half percent (0.5%) and not otherwise functioning improperly.
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PART C: OPERATING AND DESPATCH PROCEDURES
1. SCHEDULING AND DESPATCH
(a) In order to assist with scheduling of the Early Generation Facility to
meet the requirements of KPLC, the Parties agree that the following
procedures will be adhered to:
(i) YEAR AHEAD NOTIFICATION: Not less than ninety (90) days before the Early
Generation Commercial Operation Date, and thereafter not less than ninety
(90) days before the beginning of each Operating Year, KPLC shall provide
to the Seller estimated requirements on a monthly basis for Net
Electrical Output for each subsequent Year, but KPLC shall not be bound
by these figures.
(ii) MONTH AHEAD NOTIFICATION: Not less than fourteen (14) days before the
beginning of the Month prior to the Early Generation Commercial Operation
Date and thereafter not less than fourteen (14) days before the beginning
of each month, KPLC shall provide to the Seller estimated requirements,
on a day-by-day basis, for Net Electrical Output during that Month and
also, provisionally, for the following Month, but KPLC shall not be bound
by these figures.
(iii) WEEK AHEAD NOTIFICATION: Not less than forty-eight (48) hours before the
beginning of the Week prior to the Early Generation Commercial Operation
Date and thereafter not less than forty-eight (48) hours before the
beginning of each week, KPLC shall provide to the Seller estimated
requirements, on an hour-by-hour basis, for Net Electrical Output during
that week and also, provisionally, during the following week, but KPLC
shall not be bound by these figures.
(iv) EARLY GENERATION FACILITY AVAILABILITY NOTIFICATION: To enable KPLC to
give final schedules of requirements as required by subsection (v) below,
the Seller shall, by 1200 hours the day before the Early Generation
Commercial Operation Date and thereafter by 1200 hours each day, inform
KPLC of the estimated Capacity Available during each hour of that day
commencing thirty-six (36) hours ahead and, provisionally, for the day
immediately thereafter. Such estimates shall not be binding upon the
Seller, the Seller shall advise KPLC as soon as possible of any changes
in its Declared Capacity for such days.
(v) DAY AHEAD NOTIFICATION: Not less than seven (7) hours before the start of
the day before the Early Generation Commercial Operation Date and
thereafter not less than seven (7) hours before the start of each day,
KPLC shall provide to the Seller firm requirements, on an hour by hour
basis, for Net Electrical Output for the following day. The firm
requirements shall not be binding upon KPLC and KPLC may subsequently
alter its requirements.
Actual operation levels requested of the Seller will be determined by the
requirements for operation in accordance with economic despatch and may
be substantially different from the information provided in accordance
with this Part C; provided however, that actual operation levels
requested by KPLC shall at all times be subject to compliance with the
Operating Characteristics.
114
(b) In order to assist with scheduling of the Plant to meet the requirements
of KPLC, the Parties agree that the following procedures will be adhered
to:
(i) YEAR AHEAD NOTIFICATION: Not less than ninety (90) days before the Full
Commercial Operation Date, and thereafter not less than ninety (90) days
before the beginning of each Operating Year, KPLC shall provide to the
Seller estimated requirements on a monthly basis for Net Electrical
Output for the remainder of the Operating Year in which the Full
Commercial Operation Date is scheduled to occur, and thereafter for each
subsequent Year, but KPLC shall not be bound by these figures.
(ii) MONTH AHEAD NOTIFICATION: Not less than fourteen (14) days before the
beginning of the Month prior to the Full Commercial Operation Date and
thereafter not less than fourteen (14) days before the beginning of each
month, KPLC shall provide to the Seller estimated requirements, on a
day-by-day basis, for Net Electrical Output during that Month and also,
provisionally, for the following Month, but KPLC shall not be bound by
these figures.
(iii) WEEK AHEAD NOTIFICATION: Not less than forty-eight (48) hours before the
beginning of the Week prior to the Full Commercial Operation Date and
thereafter not less than forty-eight (48) hours before the beginning of
each week, KPLC shall provide to the Seller estimated requirements, on an
hour-by-hour basis, for Net Electrical Output during that week and also,
provisionally, during the following week, but KPLC shall not be bound by
these figures.
(iv) PLANT AVAILABILITY NOTIFICATION: To enable KPLC to give final schedules
of requirements as required by subsection (v) below, the Seller shall, by
1200 hours the day before the Full Commercial Operation Date and
thereafter by 1200 hours each day, inform KPLC of the estimated Capacity
Available during each hour of that day commencing thirty-six (36) hours
ahead and, provisionally, for the day immediately thereafter. Such
estimates shall not be binding upon the Seller, the Seller shall advise
KPLC as soon as possible of any changes in its Declared Capacity for such
days.
(v) DAY AHEAD NOTIFICATION: Not less than seven (7) hours before the start of
the day before the Full Commercial Operation Date and thereafter not less
than seven (7) hours before the start of each day, KPLC shall provide to
the Seller firm requirements, on an hour by hour basis, for Net
Electrical Output for the following day. The firm requirements shall not
be binding upon KPLC and KPLC may subsequently alter its requirements.
Actual operation levels requested of the Seller will be determined by the
requirements for operation in accordance with economic despatch and may
be substantially different from the information provided in accordance
with this Part C; provided however, that actual operation levels
requested by KPLC shall at all times be subject to compliance with the
Operating Characteristics.
(c) NOTICE OF CHANGE OF OPERATING LEVELS: In connection with its rights to
Despatch the Early Generation Facility or the Plant as the case may be in
accordance with this Agreement, KPLC will provide the Seller with at
least five (5) minutes advance notice of changes in operating levels to
be achieved by the Early Generation Facility
115
or the Plant as the case may be (or such greater period as may be
required by the Operating Characteristics.
(d) Where the Early Generation Facility or the Plant as the case may be
suffers an Availability Failure the Seller shall notify KPLC of the
Capacity available and this shall be the Declared Capacity as soon as
practicable. When the Availability Failure has been cleared the Seller
shall notify KPLC of the increased Declared Capacity as soon as
practicable. KPLC shall always use the Declared Capacity as notified
under this section as the upper limit for Despatch Instructions.
(e) Dispatched partial load will be no less than fifty per cent (50%) of Unit
Capacity. There will be no more than [2] shut downs despatched per month.
2. OPERATION IN ACCORDANCE WITH DESPATCH
Early Generation Facility or the Plant as the case may be shall be
operated by the Seller in accordance with the Despatch Instructions
within a despatch tolerance band of +3%.
3. RECORDING OF TELEPHONED COMMUNICATIONS
Each Party hereby authorises the other Party to record all telephoned
voice communications relating to Declared Capacity control and Despatch
of the Early Generation Facility or the Plant as the case may be received
from the other Party pursuant to this Agreement and shall supply, at the
request of the other Party, a copy or transcript of any such recording.
116
FIGURE 5
CORRECTION CURVE
(See Page ___)
117
SCHEDULE 5: PAYMENT
PART A: EARLY GENERATION TARIFF
The total levels of tariff payments in respect of the Early Generation Facility
in each month shall be according to the following:
(i) Prior to the Early Generation Commercial Operation Date the total tariff
payments in any month shall be equal to EGEC(p); and
(ii) Following the Early Generation Commercial Operation Date but prior to the
Early Generation Cessation Date the total tariff payments in any month
shall be equal to EGEC(p) plus EGCP(p).
Where EGEC(p) and EGCP(p) are calculated in accordance with Part A of this
Schedule.
ENERGY CHARGES
1. CALCULATION OF ENERGY CHARGES
For the purposes of Clause 10.2, KPLC shall pay to the Seller Energy Charges in
respect of the Net Electrical Output of the Early Generation Facility in each
month calculated as follows:
EGEC(p) = EGNEO(p) x EGECR(p)
where:
EGEC(p) = the aggregate amount of Energy Charges (US$) payable in respect
of month p;
EGNEO(p) = the aggregate Net Electrical Output (kWh) of the Early Generation
Facility in month p; and
EGECR(p) = the Energy Charges Rate (expressed in US$/kWh) prevailing in
month p as calculated in Paragraph 2 directly below.
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2. ENERGY CHARGE RATE
The Energy Charges Rate for the Early Generation Facility during each month
shall be calculated as follows:
CPI(p-1)
EGECR(p) = EGECR(b) x --------
CPI(b)
where:
EGECR(p) = as previously defined;
EGECR(b) = zero point zero one five six US Dollars per kWh (0.0156US$/kWh)
the Base Energy Charge Rate
CPI(p-1) = The United States Consumer Price Index for the month 3 months
prior to the month p; and
CPI(b) = the United States Consumer Price Index for June 1996
The royalty charge, currently set at 0.004US$/kWh, will be added to the Energy
Charge Rate at cost.
CAPACITY PAYMENTS
1. CAPACITY CHARGE RATE
The Capacity Charge Rate for the Early Generation Facility during each month
shall be calculated as follows:
EGCCR(p) = E + F
where:
EGCCR = the Capacity Charge Rate for month p, (expressed in US$/kW/month)
U Z
E = --- x --- (the non-escalable component of the Capacity Charge Rate)
12 100
where:
U = five hundred and two point nine US Dollars per kW per year
(502.9 US$/kW/year); and
Z = fifty per cent (50%) the percentage of U represented by the fixed
Capacity Charge Rate
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- -
| U G | CPI(p-1)
F = | --- x --- | x -------- (the escalable component of the Capacity
| 12 100 | CPI(b) Charge Rate)
- -
where:
G = the percentage of U represented by escalable costs such that
G = 100%-Z;
CPI(p-1) = as previously defined; and
CPI(b) = as previously defined
2. PASS THROUGH COST - Not Applicable
3. CALCULATION OF CAPACITY PAYMENTS
The Seller shall be entitled to Capacity Payments in respect of Capacity of the
Early Generation Facility in each month calculated as follows:
EGCP(p) = EGCCR(p) x EGCC
Where:
EGCP(p) = the Capacity Payments for the month p (expressed in US$)
EGCCR(p) = as previously defined; and
EGCC = the Contracted Early Generation Capacity (expressed in kW)
4. MONTHLY AVAILABILITIES
For each month in each Operating Year, starting with the month in which the
Early Generation Commercial Operation Date occurs, there shall be calculated a
Monthly Target Availability and an Actual Monthly Availability as follows:
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(i) MONTHLY TARGET AVAILABILITY
EGMTA(p) = (EGCC x H(p)) - EGSMA(p) - EGUSMA(p)
where
EGMTA(p) = the Monthly Target Availability (expressed in kWh);
EGCC = as previously defined;
H(p) = the hours in month p;
EGSMA(p) = the Scheduled Maintenance Allowance in month p (expressed in
kWh) representing the total energy not available for delivery in
month p due to scheduled maintenance outages computed assuming
the Early Generation Capacity would otherwise have been
dispatched at its Contracted Capacity calculated using the
values of EGSMA set forth in Schedule 3; and
EGUSMA(p) = the Unscheduled Maintenance allowance in month p (expressed in
kWh) as calculated using the following formula:
((EGD x M))
(EGCC x EGD x H(y) x EGOA) - [SIGMA] EGSMA(p)
(p=1)
EGUSMA(p) = -----------------------------------------------
EGD x M(y)
where:
EGD = the duration in years between the Early Generation Commercial
Operation Date and the planned date of the Early Generation Cessation
Date;
H(y) = the number of hours in a year being eight thousand seven hundred and
sixty (8760);
M(y) = the number of months in a year being twelve (12); and
EGOA = Annual Outage Allowance - as described in Schedule 3.
Where the Early Generation Facility continues to operate after the Early
Generation Cessation Date then this section shall be recalculated using the
revised planned date of the Early Generation Cessation Date.
(II) ACTUAL MONTHLY AVAILABILITY
The Actual Monthly Availability of the Early Generation Facility in month p,
EGAMA(p), (expressed in kWh) shall be calculated using the following formula:
(2 x H(p)) AC(y)
EGAMA(p) = [SIGMA] (-----)
(y=1) 2
where:
AC(y) = the Early Generation Available Capacity in Settlement Period y
(expressed in kW)
121
5. ADJUSTMENT OF CAPACITY PAYMENTS FOR MONTHLY AVAILABILITY - FIRST MONTH OF
OPERATING YEAR
If in the first month of an Operating Year, starting with the month in which the
Early Generation Commercial Operation Date occurs, the Actual Monthly
Availability is less than the Monthly Target Availability, the Capacity Payment
for that month shall be multiplied by the factor:
EGAMA(p)
--------
EGMTA(p)
6. ADJUSTMENT OF CAPACITY PAYMENTS FOR MONTHLY AVAILABILITY - SUBSEQUENT
MONTHS OF OPERATING YEAR
If in any subsequent month m of an Operating Year, the sum of the individual
Actual Monthly Availabilities for the year to date is less than the sum of the
individual Monthly Target Availabilities for the year to date, then the Capacity
Payment for that month shall be adjusted such that:
(m) EGAMA(p)
EGACP(tp) = [SIGMA] (EGCP(p) x --------)
(p=1) EGMTA(p)
where:
EGACP(tp) = the total of the Actual Capacity Payments received in the Operating
Year for each month up to and including month m.
If in any subsequent month m of an Operating Year, the sum of the individual
Actual Monthly Availabilities for the year to date is greater than or equal to
the sum of the individual Monthly Target Availabilities for the year to date,
then the Capacity Payment for that month shall be adjusted, if such an
adjustment is required, such that:
(m)
EGACP(tp) = [SIGMA] (EGCP(p))
(p=1)
7. FORCE MAJEURE PAYMENTS
For any month in which all or part of the Capacity of the Early Generation
Facility is unavailable as a result of Force Majeure the Seller shall be
entitled to Capacity Payments [which shall be calculated as follows, and
prorated for the number of hours in the month for which the Force Majeure
exists:
EGLC x E
122
where:
EGLC = the Capacity not Available as a result of the event of Force Majeure
(expressed in kW); and
E = 90% of the Capacity Charge Rate as defined in paragraph 1 above
(expressed in US$/kW/month).
The payment under paragraph 2 shall be reduced by an amount equal to the
Capacity Payment the Seller would have received had the Force Majeure event not
occurred. For the purposes of this paragraph "Force Majeure" shall not include
events or circumstances specified in Clauses 15.1(ii), (iii) and (iv) save that
in respect of Clause 15(iii) this paragraph shall apply if epidemics or plagues
materially affect the operation of the Early Generation Facility.
8. CHANGES IN CONTRACTED CAPACITY
In the event that the Contracted Capacity for the Early Generation Facility is
altered under the provisions of this Agreement during any month, the calculation
of payments shall be adjusted pro rata to reflect the differing proportions of
the month for which differing Contracted Capacities were agreed.
123
PART B: PLANT TARIFF
The total levels of tariff payments in respect of the Plant in each month shall
be according to the following:
(i) Following the Early Generation Cessation Date but prior to the Full
Commercial Operation Date the total tariff payments in any month shall be
equal to MEC(p); and
(ii) Following the Full Commercial Operation Date for the remainder of the
Term the total tariff payments in any month shall be equal to MEC(p) plus
CP(p).
Where MEC(p) and CP(p) are calculated in accordance with Part B of this
Schedule.
ENERGY CHARGES
1. CALCULATION OF ENERGY CHARGES
For the purposes of Clause 10.2, KPLC shall pay to the Seller Energy Charges in
respect of the Net Electrical Output of the Plant in each month calculated as
follows:
MEC(p) = NEO(p) x ECR(p)
where:
MEC(p) = the aggregate amount of Energy Charges (US$) payable in respect of
month p;
NEO(p) = the aggregate Net Electrical Output (kWh) of the plant in month p;
and
ECR(p) = the Energy Charge Rate (expressed in US$/kWh) in month p as
calculated in accordance with Paragraph 2 directly below.
2. ENERGY CHARGE RATE
The Energy Charge Rate, ECR(p), for the Plant in month p shall be calculated as
follows:
CPI(p-1)
ECR(p) = ECR(b) x --------
CPI(b)
where:
ECR(b) = zero point zero one nine two four US Dollars per kWh (0.01924
US$/kWh) the Base Energy Charge Rate;
CPI(p-1) = as previously defined; and
CPI(b) = the United States Consumer Price Index for March 2005 = 193.30
The royalty charge, currently set at 0.004US$/kWh, will be added to the Energy
Charge Rate at cost.
124
CAPACITY PAYMENTS
1. CAPACITY CHARGE RATE
1.1 The Capacity Charge Rate for the Plant during each month consists of the
following two components:
(i) CCRE(p) with respect to 25% portion (CCE) of the Contracted Capacity; and
(ii) CCRF(p) with respect to the remaining portion (CCF) of the Contracted
Capacity.
CCE and CCF shall be calculated as follows:
CCE = CC x 0.25
CCF = CC-CCE
where:
CC = the Contracted Capacity (expressed in kW).
1.2 CCRE(p) and CCRF(p) during each month shall be calculated as follows:
1.2.1 Calculation of CCRE(p)
CCRE(p) = AE + BE - R(p)
where:
CCRE(p) = the Capacity Charge Rate for CCE for month p,
(expressed in US$/kW/month)
VE C
AE = -- x --- (the non-escalable component of the Capacity Charge Rate)
12 100
VE = VE(1) for the period commencing on the Full Commercial Operation
Date and ending on the eleventh (11th) anniversary of the Full
Commercial Operation Date;
or
= VE(2) for the period after the eleventh (11th) anniversary of the
Full Commercial Operation Date.
where:
VE(1) = five hundred sixty one point six three six US Dollars per kW per
year (561.636 US$/kW/year) the CCE Base Capacity Charge Rate;
VE(2) = 12 x (CCRE(p) + R(p)) of the month in which the eleventh (11th)
anniversary of the Full Commercial Operation Date occurs; and
125
C = the percentage of VE represented by the fixed Capacity Charge Rate,
which shall be fifty per cent (50%) until the day which is the
eleventh (11th) anniversary of the Full Commercial Operation Date,
and which shall be seventy-five per cent (75%) thereafter; and
- -
| VE DE | CPI(p-1)
BE = | -- x --- | x -------- (the escalable component of the Capacity
| 12 100 | CPI(b) Charge Rate)
- -
where:
DE = the percentage of VE represented by the escalable costs such as
fixed O&M costs, insurance and administrative costs, DE = 100% -
C;
CPI(p-1) = as previously defined;
CPI(b) = CPI(b1) for the period commencing on the Full Commercial
Operation Date and ending on the eleventh (11th) anniversary of
the Full Commercial Operation Date;
or
= CPI(b2) for the period after the eleventh (11th ) anniversary of
the Full Commercial Operation Date.
where:
CPI(b1) = the United States Consumer Price Index for March 2005 = 193.30;
and
CPI(b2) = CPI(p-1) of the month in which the eleventh (11th) anniversary of
the Full Commercial Operation Date occurs.
CPI(p-1)
R(p) = R x ------- (the reduction in the Capacity Charge Rate for month p,
CPI(b3) expressed in US$/kW/month)
where:
R = RY/12
RY = twenty-five US Dollars and fifty US cents per kW per year (25.50
US$/kW/year)
CPI(b3) = the United States Consumer Price Index for July 2003 = 183.9
CPI(p-1) = as previously defined.
1.2.2 Calculation of CCRF(p)
CCRF(p) = AF + BF
where:
CCRF(p) = the Capacity Charge Rate for CCF for month p,
(expressed US$/kW/month
126
VF C
AF = -- x --- (the non-escalable component of the Capacity Charge Rate)
12 100
VF = VF(1) for the period commencing on the Full Commercial Operation Date
and ending on the eleventh (11th) anniversary of the Full Commercial
Operation Date;
or
= VF(2) for the period after the eleventh (11th) anniversary of the Full
Commercial Operation Date.
where:
VF(1) = four hundred eight-five US Dollars per kW per year (485 US$/kW/year)
the CCF Base Capacity Charge Rate; and
VF(2) = 12 x CCRF(p) of the month in which the eleventh (11th) anniversary
of the Full Commercial Operation Date occurs; and
C = as previously defined; and
- -
| VF DF | CPI(p-1)
BF = | -- x -- | x -------- (the escalable component of the Capacity Charge
| 12 100 | CPI(b) Rate)
- -
where:
DF = the percentage of VF represented by escalable costs such as fixed
O&M costs, insurance and administrative costs, DF = 100% - C
CPI(p-1) = as previously defined;
CPI(b) = CPI(b1) for the period commencing on the Full Commercial
Operation Date and ending on the eleventh (11th) anniversary of
the Full Commercial Operation Date;
or
= CPI(b2) for the period after the eleventh (11th) anniversary of
the Full Commercial Operation Date.
where:
CPI(b1) = the United States Consumer Price Index for March 2005 = 193.30;
and
CPI(b2) = CPI(p-1) of the month in which the eleventh (11th) anniversary of
the Full Commercial Operation Date occurs.
2. PASS THROUGH COST
This subsection 2 is for the KPLC's internal purposes only, and shall not affect
the calculation of Capacity Payments payable to OrPower 4.
127
The Capacity Charge Rate for the Plant during each month calculated in
accordance with this Part B of Schedule 5 shall include a pass through component
to consumers being a fuel displacement cost as follows:
(i) With respect to 25% portion (CCE) of the Contracted Capacity as
specified in this Part B of Schedule 5:
CCRE(pt1) = 325.749 US$kW/yr (58% of the base Capacity Charge Rate
of 561.636 US$/kW/yr)
(ii) With respect to the remaining portion (CCF) of the Contracted Capacity:
CCRE(pt2) = 281.3 US$/kW/yr (58% of the base Capacity Charge Rate of
485 US$/kW/yr)
where:
CCRE(pt1) = pass through component of CCRE(p)
CCRE(pt2) = pass through component of CCRF(p)
3. CALCULATION OF CAPACITY PAYMENTS
The Seller shall be entitled to Capacity Payments in respect of Capacity in each
month calculated as follows:
CP(p) = CCRE(p) x CCE + CCRF(p) x CCF
where:
CP(p) = the Capacity Payment for month p (expressed US$);
CCRE(p) = the Capacity Charge Rate for CCE for month p (expressed in
US$/kW/month)
CCRF(p) = the Capacity Charge Rate for CCF for month p (expressed in
US$/kW/month
CCE = the portion of the Contracted Capacity as previously defined
(expressed in kW)
CCF = the portion of Contracted Capacity as previously defined
(expressed in kW)
4. MONTHLY AVAILABILITIES
For each month in each Operating Year, starting with the month in which the Full
Commercial Operation Date occurs, there shall be calculated a Monthly Target
Availability and an Actual Monthly Availability as follows:
128
(i) MONTHLY TARGET AVAILABILITY
MTA(p) = (CC x H(p)) - SMA(p) - USMA(p)
where:
MTA(p) = the Monthly Target Availability (expressed in kWh);
CC = as previously defined;
H(p) = as previously defined;
SMA(p) = the Scheduled Maintenance Allowance in month p (expressed in kWh)
representing the total energy not available for delivery in month p
due to scheduled maintenance outages computed assuming the Plant
would otherwise have been dispatched at its Contracted Capacity;
and
USMA(p) = the Unscheduled Maintenance allowance in month p (expressed in kWh)
shall be calculated using the following formula:
(PPA(t)) x M(y)
(CC x PPA(t) x H(y) x (OA)) - [SIGMA] SMA(p)
(p=1)
USMA(p) = --------------------------------------------
(PPA(t) x M(y))
where:
PPA(t) = the number of years between the Full Commercial Date and the end of
end of the Term;
H(y) = as previously defined;
M(y) = as previously defined; and
OA = The Annual Outage Allowance - as set forth in Schedule 3.
Where the Contracted Capacity of the Plant changes after the Full Commercial
Operation Date then USMAp shall be recalculated from the date of the change in
the Contracted Capacity. PPA1 shall be the number of years between the date of
the Contracted Capacity change and the end of the end of the Term which does not
have to be an integer, CC shall be the revised Contracted Capacity in kW and all
other parameters shall be those as in the initial calculation.
(ii) ACTUAL MONTHLY AVAILABILITY
2 x H(p) AC(y)
AMA(p) = [SIGMA] (------)
(y=1) 2
129
where:
AMA(p) = the Actual Monthly Availability of the Plant in the month p
(expressed in kWh)
AC(y) = as previously defined
5. ADJUSTMENT OF CAPACITY PAYMENTS FOR MONTHLY AVAILABILITY - FIRST MONTH
OF OPERATING YEAR
If in the first month of an Operating Year, starting with the month in which the
Full Commercial Operation Date occurs, the Actual Monthly Availability is less
than the Monthly Target Availability, the Capacity Payment for that month shall
be multiplied by the factor:
AMA(p)
------
MTA(p)
6. ADJUSTMENT OF CAPACITY PAYMENTS FOR MONTHLY AVAILABILITY - SUBSEQUENT
MONTHS OF OPERATING YEAR
If in any subsequent month m of an Operating Year, the sum of the individual
Actual Monthly Availabilities for the year to date is less than the sum of the
Individual Monthly Target Availabilities for the year to date, then the Capacity
Payment for that month shall be adjusted such that
(m) AMA(p)
ACP(tp) = [SIGMA] (CP(p) x ------)
(p=1) MTA(p)
where:
ACP(tp) = the total of the Actual Capacity Payments received in the
Operating Year for each month up to and including month m.
If in any subsequent month m of an Operating Year, the sum of the individual
Actual Monthly Availabilities for the year to date is greater than or equal to
the sum of the individual Monthly Target Availabilities for the year to date,
then the Capacity Payment for that month shall be adjusted, if such an
adjustment is required, such that:
(m)
ACP(tp) = [SIGMA] CP(p)
(p=1)
7. FORCE MAJEURE PAYMENTS
For any month in which all or part of the Capacity of the Plant is unavailable
as a result of Force Majeure the Seller shall be entitled to Capacity Payments
which shall be calculated as follows, and pro rated for the number of hours in
the month for which the Force Majeure exists:
130
LC x A
where:
LC = the Capacity not Available as a result of the event of Force Majeure;
(expressed in kW); and
A = 90% of the Capacity Charge Rate as defined in paragraph 1 above
(expressed in US$/kW/month)
The payment under paragraph 2 shall be reduced by an amount equal to the
Capacity Payment the Seller would have received had the Force Majeure event not
occurred. For the purposes of this paragraph "Force Majeure" shall not include
events or circumstances specified in Clauses 15.1(ii), (iii) and (iv) save that
in respect of Clause 15.1(iii) this paragraph shall apply if epidemics or
plagues materially affect the operation of the Plant.
8. CHANGES IN CONTRACTED CAPACITY
In the event that the Contracted Capacity is altered under the provisions of
this Agreement during any month, the calculation of payments shall be adjusted
pro rata to reflect the differing proportions of the month for which differing
Contracted Capacities were agreed.
131
PART C: INVOICING
1. Content: The invoice shall, subject to this Part C, be in such form as
the Seller shall from time to time reasonably determine, and shall:
(a) have a unique number by which the invoice may be identified; and
(b) identify the month in respect of which payment is due; and
(c) state the Energy Charge for the month in respect of which payment is due,
including the relevant quantities metered and recorded in accordance with Clause
11 and Part B of Schedule 4 and such other information including relevant value
of the United States Consumer Price Index and calculations, in reasonable
detail, to permit KPLC to confirm the consistency of the invoice with the
provisions of Schedule 5; and
(d) state the Capacity Charge Rate for the month in respect of which payment is
due and such other information including the relevant value of the United States
Consumer Price Index and calculations, in reasonable detail, to permit KPLC to
confirm consistency of the invoice with provisions of Schedule 5; and
(e) state the Monthly Target Availability and the Actual Monthly Availability
for that month; and
(f) state any other charge payable by KPLC together with such other information
and calculations, in reasonable detail, as shall be required by KPLC to verify
that charge; and
(g) state the total amount payable; and
(h) state the due date for payment of the invoice.
2. Compliance with statutes, etc.: Each invoice shall comply with all relevant
statutes, regulations and directives, including those relating to Value Added
Tax.
3. Details: Each invoice shall be accompanied by a detailed statement setting
out the Declared Capacity in respect of each Settlement Period, revisions (if
any) to the Contracted Capacity following a Contracted Capacity Test, details of
any Availability Failure and the computation of the Net Electrical Output
delivered at the Delivery Point in response to a Despatch Instruction for each
Settlement Period and such other information and calculations, in reasonable
detail, as shall be required by KPLC to verify the invoice.
132
PART D: CONSUMER PRICES INDEX
1. If in the opinion of either Party the CPI cannot be properly calculated as a
result of any of the following circumstances (an "Event"):
(a) the non-availability or discontinuance of one or more of the figures, values
or prices required to calculate the CPI (whether permanent or temporary);
(b) an error is contained in one or more of the published figures, values or
prices required to calculate the CPI;
(c) the basis upon which the CPI is calculated has been changed and thereby
superseded so as materially to affect the validity of CPI comparison over time
other than any change arising from changes in the respective consumption
patterns upon which the CPI was based;
then the Parties shall meet and seek in good faith to agree upon the means
whereby the CPI may be adjusted or to agree upon a replacement index and if the
Parties cannot agree upon such adjustment or replacement index within a period
of thirty (30) days either Party may refer the matter to an Expert who shall
determine such replacement index as most closely reflects the CPI prior to the
Event and also the date from which such replacement index shall be applicable.
2. If an index other than the CPI shall be used, then the provisions of this
Part D of this Schedule 4 shall apply to such index mutatis mutandis.
133
SCHEDULE 6: CONDITIONS PRECEDENT
Part A: Preconditions of the Seller
(i) The grant to the Seller of geothermal resources licence for the Licence Area
necessary for the Geothermal Reservoir Development;
(ii) The execution by the GOK of the Site Agreement;
(iii) The granting to the Seller of a Water Permit.
Part B: Preconditions of KPLC
(i) The Seller providing to KPLC such documentary evidence as shall reasonably
satisfy KPLC that the Seller has or has access to such funds as are necessary
for the conduct of the Appraisal Works and construction of the Early Generation
Facility in accordance with the terms of this Agreement. Such documentary
evidence shall include evidence of all loans, grants or other financing
arrangements as the Seller shall have procured.
134
SCHEDULE 7: CONSTRUCTION PROGRAMME
(See Page ____)
135
SCHEDULE 8: PARTIES' ADDRESSES AND NOTICE DETAILS
KPLC:
The Kenya Power & Lighting Company Ltd.
▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇-▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇
Fax: 30099
Tel: ▇▇▇▇▇▇▇▇
Marked for the attention of: The Company Secretary
Seller:
OrPower 4 Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇
Fax: Nevada, USA (▇▇▇) ▇▇▇-▇▇▇▇
Tel: Nevada, USA (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
OrPower 4
Kenya Branch
Off Moi South Lake Road
Hellsgate ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
In either case marked for the attention of: the Company President
136
SCHEDULE 9: INSURANCE
Part A: Construction Period
(The period from the Effective Date until the Full Commercial Operation Date)
1. Marine and Air Cargo:
Cover: All materials, equipment, machinery, spares and other items for
incorporation in the Plant and the Seller's Steam Field Facilities against all
risks of physical loss or damage while in transit by sea or air from country of
origin anywhere in the world to the Site in Kenya, or vice versa from time of
the insured items leaving warehouse or factory for shipment to the Site. Cover
to institute Cargo Clauses (Air), institute War Clauses (Air), (Sendings By
Post), institute Strikes Clause (Cargo, Air Cargo) or equivalent.
Sum Insured: An amount equal to cost and freight of any shipment
Deductible: Not to exceed US$ 10,000 for each loss; except US$ 5,000 for the
turbine/generators.
Insured: The Seller and its relevant contractors.
2. Loss of Revenue Profits (following Marine incident) - "Marine Delay in Full
Commercial Operation Date"
Cover: Against loss of revenue following delay in start of commercial operations
as a direct result of physical loss or damage to the materials, equipment,
machinery and other items in transit by sea or air to the Site, to the extent
covered under the Marine Cargo insurance.
Sum Insured: An amount equal to the estimated continuing expenses, including
debt service, during the indemnity period.
Indemnity Period: 12 months or the period required to repair or replace
materials, equipment or machinery, whichever is less.
Deductible: Not to exceed 60 days.
Insured: The Seller.
3. Contractors' All Risks
Cover: The contract works including the Early Generation Facility, Appraisal
Works executed and in the course of execution, materials and temporary works,
while on the Site, against all risks of physical loss or damage other than war
and kindred risks, nuclear risks, unexplained shortage, cost of replacing or
repairing items which are defective in workmanship material or design;
penalties; consequential losses; cash; vehicles; vessels; aircraft and other
standard exclusions contained in such policies. Cover shall provide the
equivalent terms, conditions and perils/causes of loss provided under the
Erection All Risks insurance policy.
137
Sum Insured: The Contract Price.
Deductibles: In relation to Contract Works, Materials, etc.
(a) arising during the construction and testing period:
(i) from ▇▇▇▇▇, ▇▇▇▇▇▇▇, Flood, Water Damage, Earthquake, Subsidence and
Collapse - Not to exceed [US$ 10,000]
(ii) from any other cause other than in (a)(i) above - Not to exceed [US$ 5,000]
(b) arising out of operational testing or Commissioning:
(i) of turbine generators - Not to exceed US$ 50,000
(ii) of plant other than turbine generators - Not to exceed US$ 35,000
Period of Cover: Actual construction, testing and Commissioning.
Insured: The Seller, its contractors and its lenders and all suppliers on the
Site; KPLC shall be added as an additional insured as its interests may appear.
4. Loss of Revenue (following C.A.R.) "Delay in a Commercial Operation Date"
Cover: Against loss of revenue following delay in start of commercial operations
as a direct result of physical loss or damage to the works during construction
or operational testing to the extent that such loss or damage is covered under
the Contractors' All Risks policy.
Sum Insured: An amount equal to the estimated continuing expenses, including
debt service, during the indemnity period.
Indemnity Period: Not less than 12 months.
Insured: the Seller and its lenders.
Deductible: Not more than 90 days.
Period of Cover: Construction, testing and Commissioning periods of the Early
Generation Facility and Plant from mobilization of the Seller's contractors
until the day following the Full Commercial Operation Date.
5. Public Liability
Cover: Against legal liability to third parties for bodily injury or damage to
property arising out of the construction, testing and Commissioning of the Early
Generation Facility and the Plant.
Sum Insured: For any one claim: US$ 5,000,000.
138
Deductible: Not to exceed US$ 25,000 for each claim for damage to property. None
for injury to persons.
Insured: The Seller and its contractors; KPLC shall be added as an additional
insured as its interest may appear.
Period of Cover: The actual construction, testing and Commissioning of the Early
Generation Facility and the Plant from mobilization of the Seller's contractors
until the day following Full Commercial Operation Date.
6. Miscellaneous
Other insurance as is customary, desirable or necessary to comply with local or
other requirements, such as Workmen Compensation Insurance in relation to all
workmen employed in the construction of the Plant and Motor Insurance on a
vehicle.
139
Part B: Operating Period
(The period from the Full Commercial Operation Date until the end of the Term)
1. All Risks Insurance - Fixed Assets
Cover: All building contents, machinery, stock, fixtures, fittings and other
personal property forming part of the Plant against "All Risks" of physical loss
or damage, including (but not limited to) those resulting from fire, lightning,
explosion, spontaneous combustion, storm, wind, tempest, flood, hurricane, water
damage, riot, strikes, malicious damage, earthquake, collapse and/or loss of
contents of tanks, subject to standard policy exclusions.
Sum Insured: Full replacement value of the Plant.
Deductible: Not to exceed US$ 50,000 each loss.
Insured: The Seller and its lenders; KPLC shall be added, as an additional
insured as its interests may appear.
2. Consequential Loss Following All Risks
Cover: Loss of revenue due to loss of capacity and/or loss of output as a direct
consequence of loss of or damage to Plant and caused by a period insured under
paragraph 1 above.
Sum Insured: An amount equal to the estimated continuing expenses, including
debt service, during the indemnity period.
Indemnity Period: Not less than 12 months.
Deductible: Not more than 60 days.
Insured: The Seller and its lenders.
3. Machinery Breakdown
Cover: All machinery, plant and ancillary equipment forming part of the Plant
against sudden and unforeseen physical loss or damage resulting from mechanical
and electrical breakdown or derangement, explosion or collapse of pressure
vessels, electrical short circuits, vibration, misalignment, excessive current
or voltage, abnormal stresses, centrifugal forces, failure of protective or
regulating devices, overheating, entry of foreign bodied, impact, collision and
other similar causes.
Sum Insured: Full replacement value of all machinery, plant, boilers, etc.
Deductible: US$ 10,000 each loss.
Insured: The Seller and its lenders; KPLC shall be added as an additional
insured as its interest may appear.
140
4. Consequential Loss following Machinery Breakdown
Cover: Loss of revenue due to loss of capacity and/or loss of output as a direct
consequence of loss or damage to the Plant caused by a peril insured under
paragraph 3 above.
Sum Insured: an amount equal to the estimated continuing expenses, including
debt service, during the indemnity period.
Indemnity Period: Not less than 12 months.
Deductible: Not more than 60 days.
Insured: The Seller and its lenders.
5. Public Liability
Cover: Legal liability of the insured for damage to property of third parties or
bodily injury to third parties arising out of the ownership, operation and
maintenance of the Plant.
Sum Insured: US$ 5,000,000 for any occurrence.
Deductible: US$ 25,000 each claim for property. None for injury to persons.
Insured: The Seller and its lenders; KPLC shall be added as an additional
insured as its interest may appear.
6. Off Site Facilities
The Seller shall ensure that all plant, equipment and machinery which is
necessary for the operation or development of the Early Generation Facility or
the Plant but which is not located at the Temporary Site or the Site as the case
may be which shall include but not be limited to: drilling rigs and equipment,
▇▇▇▇▇, pipework, cables and instrumentation equipment is comprehensively insured
to its replacement values. The Seller shall also procure loss of revenue and
third party insurance to a suitable value to be agreed with KPLC for this plant
equipment and machinery.
7. Miscellaneous
Other insurance as are customary, desirable or necessary to comply with local or
other requirements, such as Workmen's Compensation insurance in relation to all
workmen employed in the Plant or in connection with its operation, and Motor
Insurance on any vehicle.
If KPLC is added as an additional insured on any of the insurance listed in this
Schedule 9, KPLC acknowledges and agrees that (a) it will not be included as a
loss payee on any insurance proceed payments relative to such insurance
coverage, and (b) it will not be involved in any claim negotiations, discussion
or settlements.
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SCHEDULE 10
SITE AGREEMENT
(See Pages __)
142