DOMINICAN REPUBLIC—Update: Conditions for CDEEE-Related PPAs for Renewables

SUMMARY

In our August 1, 2017 Cross Border Transactions Newsletter we informed about the announcement made by the Corporación Dominicana de Empresas Eléctricas Estatales (CDEEE) regarding several new conditions included in the Power Purchase Agreements (PPAs) for wind and solar photovoltaic projects that the CDEEE had recently signed. Because the CDEEE’s announcement is not clear as to whether such new... (see full summary)

 
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In our August 1, 2017 Cross Border Transactions Newsletter we informed about the announcement made by the Corporación Dominicana de Empresas Eléctricas Estatales (CDEEE) regarding several new conditions included in the Power Purchase Agreements (PPAs) for wind and solar photovoltaic projects that the CDEEE had recently signed. Because the CDEEE’s announcement is not clear as to whether such new conditions will be included in all future PPAs for renewable projects, we advised that developers, particularly those whose projects already have a definitive or provisional concession, should, among other actions, consider such new conditions in their project development processes, seek written clarification from the CDEEE as to whether such conditions will also be included in their respective PPAs and, if so, request details of each of such new conditions and related protocols.

The conditions described in the CDEEE’s announcement, which were outlined in the foregoing Newsletter, are the result of specific instructions given to the head of the CDEEE by the country’s president in a power of attorney issued on November 27, 2015 (Presidential Power of Attorney). The instructions contained in the Presidential Power of Attorney were given, among other reasons, (i) as part of the current administration’s ongoing efforts to diversify the country’s energy matrix and increase the country’s available energy capacity from renewable sources, and (ii) to deal with some of the problems that have hindered actual development of renewable projects since the enactment of Law No. 57-07 of Renewable Energy Incentives and its Special Regimes and the Regulations issued in connection with such Law.

The new PPA conditions are expressly outlined in the Presidential Power of Attorney and are mandatory for all PPAs for renewables projects to be signed or renegotiated by the CDEEE in the near future.

The Presidential Power of Attorney contains the following mandatory PPA conditions:

  • Minimum energy price for wind and solar photovoltaic projects

    • 11.50 cUS$/kWh for wind projects
    • 12.50 cUS$/kWh for solar photovoltaic projects
  • Maximum energy price for wind and solar photovoltaic projects

    • 13.80 cUS$/kWh for wind projects
    • 14.28 cUS$/kWh for solar photovoltaic projects
  • Maximum PPA term: 20 years from the Project’s commercial operation date.
  • Evidence of availability of funds for the Project: Developer must...

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