‘This Annex provides a summary of the key technical terms to be discussed between a potential EPC contractor (the “Contractor”) and the potential owner (“Owner”) of a megawatt-scale, ground- ‘mounted solar photovoltaic (PV) power plant. It is expected that the term sheet that follows will be used to guide discussions between the Owner and the Contractor. Throughout the term sheet, [x] is used to indicate a value that needs to be determined through an agreement between the Contractor and the Owner, and in some cases an indicative value [such as 10 percent] is provided in place of [x]. Once all the details have been agreed upon, lawyers will typically use the term sheet to draft the full contract. Icis assumed that all plant equipment will be sourced by the EPC contractor and that the EPC contract has separately been provided with “Employer’s Requirements” documentation, which specifies minimum technical requirements far the plant construction, including technical specifications for modules, inverters, transformers, cables, civil works, and procedures for safety, quality control, monitoring, and security. ‘Annex 2: EPC Contract Heads of Terms 187Project Name “Capacity ‘Owner “Contractor ‘Type of Contract “Contract Price ‘Scope of Work “Owner Responsibiities “Contractors Responsibilities 8B _A Project Developers Guide to Ltity-scale Solar Photovoltal Power Plant “Turnkey Engineer, Procure and Construct contract for implementation of a solar photovoltaic (PV) power plant with a design feof [25] years. “The Contract price i box) «The provision of al plant materials (including, support structures and PV modules) «site preparation, ground and cv works including drainage. «Assembly and installation + Grid connection infrastructure, + Equipment (including construction equipment) + Labour and the performance of al works and services, + Design, engineering, construction, commissioning, start-up, and testing according to industry standards. + Procurement and construction of fencing, security arrangements, and monitoring systern, + Construction ofall balance of plant. + Removal of debris. + Remedying defects, ‘Owner shall be responsibie for “Ensuring thatthe Contractor has right of access to the ste “+ Obtaining al permits and consents required forthe operation ofthe plant (including planning permission and ‘grid connection permits). ‘Owner shall provide Contractor with all existing site information for review. Contractor shall be responsible for interpreting this data and for additional site investigations required. ‘Owner shall pay the Contract Price to Contractor according tothe Payment Schedule. Contractor wil eview al relevant permits and authorisations obtained by the Owner and declare that they are acceptable orks shallcomply with requrerenis ofthe technical specications as deserbed in the Quuners Requiements document. ‘Works shall comply with al applicable laws, consents, and permits (including regional and local laws). ‘All materials, equipment, and plant components shall be new. ‘The Works willbe performed so as to ensure the safety and health ofthe workers. “The works) aclity shall achieve the performance requirements and Guaranteed Performance levels. Contractor will be responsible for: + Allactvties necessary forthe completion of the PV plant. + Compliance with all applicable laws «Technical design and specifications + Quality control of PV modules, and ensuring they are installed in accordance with the module installation manual «Safeguarding all equipment and materials, including transport and storage, + Engineering, technical design, drawings, and manuals. “The Contractor is responsible for obtaining and maintaining «Consents and permits required to perform the works. + Export/import licences for materials. lant, equipment, and similar consents. + Consents and permits for transporting materials lant and equipment to site, nd unloading. + Labour necessary forthe assembly and installation of al ofthe equipment, accessories, and materials provided (continued)(Quality standards “Project Schedule “Subcontracting “Implementation “Site Conditions “Completion Date ‘Contractor shal provide a comprehensive Quality Standards document describing plant acceptance criteria. This Shale reviewed and approved by the Owner and wil include a description of factory acceptance test procedures and sie acceptance test procedures for major plant components, including wansformers and inverters. Contractor shal provide a Gant char constuction schedule. Contractor shal provide progress report updates ona weekly bass during construction “The Contract remains uly esponsibie oral works completed by subcontractors. The Contractor aditionaly confi thatthe wotk of ts subcontractors meets the specfeations set forth inte EPC Contract an comes with the aw. * Contractor warrants abity to complet the plant, te elecicalinfastucture and connection infrastucture in accotdance with the projec schedule + Lguidated damages will appy if scheduled completion dates are not achieved + Contractor shal supply manvals documents and records a pr industry norms. + Contractor to be responsible for storage and disposal of hazardous material and rectation of any contamination caused by performance ofthe plant + Contractor to provide spare parts and consumables. + Contractor to provide tools necessary for commissioning and testing and to make provision for commissioning and testing tobe witnessed by the Owners representative + Owner isto provide Contractor with all avalabe ste information descibng the physical characteristics of the site. + Contractor to cary out further site investigations as required + Contractor takes full responsiblity an risk or further site investigations and ensures tha it has studied and inspected to its full satisfaction the geotechnical, geo-morphological, and hydrogectogical tudes and accessed ‘conditions and environmental characterises of hes. + Contractor shall declare inthe EPC contract that the sites suitable or the execution ofthe works but will notbe responsible or costs arising rom the discovery of a) pre-existing toxic waste; b) aris historical ‘or archaeoteaical fincas; «underground pipelires; od} munitions, where thase were not detected in tne information provided by Owner the Completion Date (data of signing the Pou'sional Aceptance Certificate) ffom the date ofthe EPC contract Notice To Proceed ibe achieved within fx] months (continued) Annex 2: EPC Contract Heads of Terms 89Ea Topic ‘Acceptance “Transfer of Tide "Warranty Periods “Guaranteed Performance 190 A project Devel Se eae) Nature of Agreement ‘Acceptance Tests ‘The Contractor will perform: a) tests required under the applicable law; b) commissioning tests according to IEC 62446; ¢) performance tests. Performance tests wil be carried out to determine whether the plant: a) has achieved the requirements for completion, bs compliant with quality standards, ¢) is compliant with technical specifications, and d} to ascertain ‘whether the guaranteed performance has been attained. The testing pracess shal be clearly described ‘A test sare of madules shall be taken from the plant and sent to an independent testing institute for flash testing, Provisional Acceptance “The Ouer shal prowde a Provisional Acceptance Certificate when al ef the recuirements for completion have been achieved and testing has been completed. A punch Ist of outstanding items wil be prepared. To pass provisional acceptance, te value of outstanding items must be less than ¥% of the Contract Price. Items onthe punch ist willbe remedied wthin fe] manths fram signing ofthe Prowsianal Acceptance Ceniicat Signing ofthe Prowsional Acceptance Celificate shall trigger the start ofthe Performance Warranty Period Intermediate Acceptance “The partis shall agree to requirements for Intermediate Acceptance. These wil include: + Aperformance rato test averaged over one year of operation since provisional acceptance, taking into account an agreed rate of degradation Final Acceptance “he partes shall age to requirements fr final acceptance These wllinehide + Aperformance ratio test, averaged over the two years of operation since provisional acceptance, taking into ‘account an agreed rate of annual degradation. Theos ner shall ravide a Final Acceptance Cerificate when al ofthe requirements fo completion have been achieved. “The ownership ofthe plant, materials, equipment and warranties will transfer (rom the Contractor tothe Owner at provisional acceptance. The Contractor shal be responsible for any materials or other items delivered by the (Owner or by third partes up to provisional acceptance. ‘The Performance Warranty Period will be 2 years, starting from the signing ofthe Provisional Acceptance Ceitifcate ‘The Contractor shall transfer all the guarantees and warranties directly {rom suppliers and sub-suppliers in favour ofthe Owner. Ths shall include: Module Power Performance Warranty: [25] years [90% untll year 10, 80% untll year 2, or linear power warranty according to the manufacturer's specifications} Inverter Warranty: [5] years. ‘Support Structure Warranty: [0] years. “The Defect Warranty Period i iave a durelion of [2] yeets (rom isue of Provisional Acceptance Certfical= During this periad the Contractor will emedy defects and omissions at its awn cost. “The petiod willbe extended by a further period of [i] year for any defect thats remedied during the intial perio. ‘A minimum Guaranteed Performance Ratio of [fs will be achieved at provisional acceptance. The Performance Ratio (PR) shall be measured at the export meter over a period of [is] days prior to issue ofthe Provisional Acceptance Certificate. The PR measurement shallbe temperature compensated and irradiation measured using secondary standard thermal pyranometers. A minimum of [x% of test time shall be at a measured irradiance above bqwine. ‘A minimum Guaranteed Performance Ratio of [8o}% willbe achieved during the Performance Warranty Period Lquidated damages for PR shortfalls will be provided by the Contractor, according to agreed formulae (continued) fe to Utlity-scale Solar Photovoltac Power PlantsPayment Schedule Performance Bond “Warranty Bond “Liquidated Damages "Maximum Penalty Cap Insurance Termination Geena tinued) 2 schedule of milestones willbe dein inthe contract. The Owner vl transfer a percentage of te Contract Price to te Contractor when milestones are achieved: Advance hole ‘Civil Works completed ol Mounting System installed ol Modules and inverters delivered (gal Inverters and modules Installed pol Grid connection achieved Isl Mechanical Acceptance Isl Provisional Acceptance: hole ‘At the signing ofthe contrac, the Contractor wil procure a performance bond (bank guarantee) of value io) of the contract price. The purpose ofthis isto guarantee funds fr the Owner incase: a) delay liquidated damages are payable: b) Guaranteed Performance Ratio isnot achieved at provisional acceptance; c) the Contractor has ‘defaulted in its obigations under the contract. “The performance band will be returned to the Contractor atthe signing of the Provisional Acceptance Certificate Uipan Signing of the Provisional Acceptance Centifeata the Contractor wil provide a watraney bord (oanke ‘guarantee) with a value of Is) of the contract price. “The warranty bond will guarantee the Owner funds in case liquidated damages that are payable or the Contractor ‘do not meet obligations during the Defect Warranty Period. The warranty bond willbe returned to the Contractor at the signing of the Final Acceptance Cert ficate Delay Liquidated Damages: Delay liquidated damages of 0.25) of the EPC contract price wil be provided per week of delay beyond the agreed completion date, up to a maximum cap of to). Performance Liquidated Damages: A price adjustment will apply ifthe Contractor fais to meet the Guaranteed Performance Ratio during acceptance tests and does not rectify such under- performance. The liquidated damages willbe agreed as [.5} ofthe contract price for each (]% shortfall in the PR below the Guaranteed Performance Ratio. The cap on the performance liquidated damages wil be [1o}% of the contract price “The maximum aggregate lability of the Contractor for delay liquidated damages and performance liquidated ‘damages willbe [20}% of Contract Price. “The Contractor shall pracure insurance policies as fellows. a) Construction All Risk Insurance; b) Maine Transit Insurance: c) Third Party Labilty Insurance; é) all ether compulsory insurances according to the applicable law. “The Owner shall be enttied to terminate the contract if «The performance liquidated damages owed by the Contractor exceeds the agreed maximum cap, +The delay liquidated damages owed by the Contractor for late delivery of the plant exceeds the agreed maximum cap. + In case of justified refusal of isuance of the Provisional or Final Acceptance Comificates Annex 2: EPC Contract Heads of Terms 48%