INVITATION TO BID

for the SUPPLY of Biomass Fuel

Bid Notice No. KOWEPO-BIOMASS FUEL-2018-SP03

BID CLOSING DATE: 14:00 PM, 11th September, 2018

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 TABLE OF CONTENTS
[PART - A] BIDDING INSTRUCTIONS .............................................3
1.0 GENERAL ..................................................................................4
1.1 INTRODUCTION .................................................................................4
1.2 QUANTITY........................................................................................4
1.3 PRICE..............................................................................................4
1.4 QUALITY SPECIFICATIONS .....................................................................5
1.5 DELIVERY .........................................................................................6
1.6 DETERMINATION OF QUANTITY AND QUALITY ...........................................6
1.7 PAYMENT ........................................................................................7
1.8 COMPLIANCE WITH INVITATION TO BID ...................................................7
1.9 WITHDRAWAL OF TENDERING ...............................................................8
1.10 RESTRICTION ON PARTICIPATION IN FUTURE TENDERS ..................................8
1.11 MISCELLANEOUS................................................................................8
2.0 PREPARATION OF BID PROPOSALS .......................................... 10
2.1 QUALIFICATIONS OF THE BIDDER .......................................................... 10
2.2 BID BOND ...................................................................................... 10
2.3 BID DOCUMENTS ............................................................................. 11
2.4 ENVELOPING AND SUBMISSION OF BID DOCUMENTS................................. 13
2.5 BID CLOSING DATE........................................................................... 13
3.0 EVALUATION OF BID ............................................................... 14
3.1 NON-DISCLOSE OF BID EVALUATION ...................................................... 14
3.2 EVALUATION OF PROPOSAL ................................................................ 14
3.3 CONDUCTING DUE DILIGENCES ............................................................ 15
3.4 SELECTION OF THE SUCCESSFUL BIDDERS, RIGHT OF REJECTION.................... 15
3.5 APPOINTMENT OF CONTRACTORS ........................................................ 16
3.6 PERFORMANCE BOND…………………………………………………….………………16
[PART - B] BID FORMAT ............................................................. 17
[PART - C] CONTRACT ................................................................ 26

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[PART - A] BIDDING INSTRUCTIONS

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1.0 GENERAL
1.1 Introduction
1.1.1 Korea Western Power Co., Ltd. (“KOWEPO”), duly organized by virtue of the
law of the Republic of Korea and having its head office in Taean-gun,
Chungcheongnam-do, Korea, issues this Invitation to Bid (“ITB”) for procurement
Biomass Fuel to provide a bidder (“Bidder”) with information on the procedures
of and requirements for bidding and contractual terms and conditions.

1.1.2 KOWEPO has a coal-fired thermal power plant that has 500MW eight units with
pulverized type boiler (“Tae-an”). In order to meet the obligation of the
Renewable Portfolio Standard policy in Korea, KOWEPO intends to co-fire Biomass
Fuel in Tae-an.

1.2 Quantity
1.2.1 The quantity of BIOMASS FUEL to be purchased is 35,000 Metric Tons (“MT”)

1.2.2 Bidders are requested to offer from minimum of 5,000 Metric Tons up to
35,000 Metric Tons on a DDP(Delivered Duty Paid, Incoterms 2010) basis.

1.2.3 Bidders bid by Wood Pellet or Woody Biomass SRF(Pellet Type).

1.3 Price
Price shall be on only DDP(Delivered Duty Paid) and KOWEPO reserves the right
to award the contract on a DDP basis subject to its evaluation. Bidders are
requested to offer a single fixed DDP price.

1.4 Quality Specifications

BIOMASS FUEL shall be manufactured from wood fibre exclusively, without any type of
binder or other chemically treated biomass and should meet the quality specifications as
below.

Item Unit Limit of Range

Diameter mm 6~8

Length mm ≤ 32

Unit Volume Mass (As Received Basis) kg/㎥ ≥ 550

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 Total Moisture (As Received Basis) % wt ≤ 10

Net Calorific Value (As Received Basis) kcal/kg ≥ 3,900

Ash (Air Dried Basis) % wt ≤ 3.0

Chlorine (Air Dried Basis) % wt < 0.05

Sulphur (Air Dried Basis) % wt ≤ 0.05

Nitrogen (Air Dried Basis) % wt < 0.7

Ash Fusion Temperature, IDT

℃ ≥ 1,150
(Reducing Atmosphere)

Hydrogen(Dry Basis) % wt -

Biomass(As Dry Basis) % wt ≥ 95

Hg ≤ 0.05

Cd ≤ 0.5

Pb ≤ 10

As ≤ 1.0
Trace Element mg/kg
Cr ≤ 10

Cu ≤ 10

Ni ≤ 10

Zn ≤ 100

Fines % wt < 2.0

DNA Test(Rice Husk) Negative

※ Each item above shall be determined in accordance with the Noficaon No. 2018-8 by Korea
Forest Research Institute along with Notification No. 2014-135 by Korea Ministry of
Environment and the standards approved and recognized by Analyst listed on KOLAS.

※Bidders are requested to submit the quality certification including the test results of all the items
above and on which the name of the local supplier shall be marked.

※ Bidders are requested to submit the quality cerficaon issued within 6 month basis on closing
date by the international independent inspection company(Analyst).

1.5 Delivery
1.5.1 BIOMASS FUEL shall be delivered to Tae-an Power Plant on DDP basis. Bidders
shall arrange all the relevant vehicles and facilities till completing discharging
BIOMASS FUEL at the designated area in Tae-an Power Plant. For the stability of
supply, the Bidder may use more than one transportation company.

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1.5.2 Bidders shall indicate the preferred delivery schedule from 21st of September 2018
to 31st of December 2018. KOWEPO may refer to the Bidders’ delivery schedule.
However KOWEPO will not be obliged to take the Bidders’ delivery schedule into
consideration when deciding the final delivery date and will be free to designate
the delivery date in light of KOWEPO’s own needs. The quantities of BIOMASS
FUEL to be delivered by Bidders shall be delivered during the final delivery schedule .

1.5.3 The Seller has to deliver BIOMASS FUEL in forms of bulk each day in container
trucks to certain places designated by the Bidder in Tae-an Power Plant pursuant
to the proposed delivery schedule as below.

Baljeon-ro, Wonbuk-myeon,
Location of Tae-an
Taean-gun, Chungcheongnam-do

Daily Consumption Amount 400~650 MT

Delivery Schedule 21st September, 2018 ~ 31st December, 2018

* Detailed delivery date and daily quantity can be changed depending on the internal
affairs of KOWEPO and the final delivery date and daily quantity will be confirmed by
KOWEPO after Contract.

1.5.4 Any kind of civil complaints incurred during the delivery, including damages
due to dust particles arising from such delivery, shall be borne by Bidder. Upon
falling behind the delivery schedule for that reason, Bidder is liable to pay
liquidated damages as per the relevant clauses of the Contract.

1.5.5 Origin

Upon request by KOWEPO, Bidders shall provide relevant supporting documents

including certificates, issued by the relevant authorities of the exporting country,
to demonstrate the legal status and current situation of BIOMASS FUEL forest
from which the BIOMASS FUEL would be supplied. The relevant evidence
documents shall be in English.

1.6 Determination of Quantity and Quality

1.6.1 The determination of the quantity analysis of BIOMASS FUEL at the KOWEPO
Power Plant shall be final. The determination of BIOMASS FUEL shall be made by
the truck scale weigher installed at the KOWEPO Power Plant. The result of the
inspection at the KOWEPO Power Plant shall be the basis of the payment of
BIOMASS FUEL.

1.6.2 The inspection for BIOMASS FUEL quality analysis shall be performed at the
unloading port or domestic production facilities and the discharging area in
KOWEPO Power Plant. The costs required for these analysis and the
determination of quality certification shall be borne by the Bidder.

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1.6.3 The Inspection and procedures of sampling for BIOMASS FUEL quality analysis
at the unloading port or domestic production facilities shall be supervised by an
international independent inspection company(Analyst) appointed by KOWEPO
through mutual negotiation with the Bidder. The quality result of BIOMASS FUEL
at the unloading port or domestic production facilities shall be provisional.
However, five (5) days prior to the delivery date at the discharging area in Tae-an
Power Plant, the Bidder should provide KOWEPO with a copy of certificates of
quality. The Buyer may delay discharging BIOMASS FUEL until receipt of the
certificate.

1.6.4 The procedures of sampling for BIOMASS FUEL quality analysis at the
discharging area in Tae-an Power Plant shall be performed by the person or
persons appointed by KOWEPO. The inspection shall be the final determination of
BIOMASS FUEL quality and performed by an international independent inspection
company(Analyst) accredited by Korea Laboratory Accreditation Scheme(KOLAS).
KOWEPO shall appoint one of them through mutual negotiation with the Bidder.
The result of the inspection at the Tae-an Power Plant shall be the basis of the
payment of BIOMASS FUEL.

1.7 Payment
1.7.1 KOWEPO shall make payment in USD via Telegraphic Transfer (T/T) payment.

1.7.2 Bidder shall issue an invoice to KOWEPO after completion of inspection at the
discharging area. Payment shall be made within seven (7) Korean bank working
days after receiving an invoice.

1.8 Compliance with Invitation to Bid

1.8.1 Bidder shall prepare and submit the Bid in compliance with the procedures and
requirements as provided in ITB. Any failure to do so may provide KOWEPO with a
reason to reject or to unfavourably evaluate the bid. Bidder shall be regarded as
having been thoroughly acquainted with and having accepted all the contents of
ITB. Upon submission of the bid documents, Bidder is thereafter regarded as
having agreed to fully comply with the terms and conditions of the Contract as
attached in ITB.

1.8.2 Those submitting proposals should be responsible for the completeness and
accuracy of all information contained in and used in preparation of its proposal
and for having supplied all necessary information. Incomplete proposals shall be
rejected.

1.9 Withdrawal of Tendering

KOWEPO has the right, at any time and without any liability to the Bidder, to
withdraw or delay this tendering, or to alter the scope of purchase.

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1.10 Restriction on participation in future tenders
1.10.1 Without prejudice to any rights of KOWEPO contained herein including the
rights set forth in the Contract, KOWEPO further reserves the right to restrict any
Bidder from participation in future tenders of KOWEPO, for a period of between 1
month and 2 years, in case it is clear that the Bidder, or its representative,
manager or other employee, will impair fair competition or the proper
performance of the Contract, as prescribed by the Regulations on Contracting
Affairs of Government-Owned Corporations and Quasi-Governmental Institutions,
and falls under any of the following subparagraphs; provided, that KOWEPO may
decide not to impose such restriction at its discretion, if the grounds for restriction
occurred as a result of the conduct of the Bidder’s representative, manager or
other employee, and the Bidder has taken reasonable care and did not negligently
supervise such representative, manager or other employee;
- A person who has subcontracted in violation of a restriction on
subcontracting prescribed by law (excluding violations of the obligation to
notify subcontracting), and a person who has subcontracted without
approval of KOWEPO or modified the conditions to subcontracting
approved by KOWEPO;
- A person who has violated the provisions of the Monopoly Regulation
and Fair Trade Act or the Act on Fairness in Subcontracting Transactions,
whereby the Korea Fair Trade Commission has requested such person’s
restriction from participation in bidding;
- A person who, through consultation with a bidder or contracting party
during competitive bidding, or execution or performance of a contract,
has agreed in advance on the bid price, order quantities or contract terms,
or colluded for the bid award to a certain person or the selection of the
eligible supplier;
- A person who has paid a bribe to any relevant person in relation to the
bidding, bid award, or execution or performance of a contract; or
- A person who has forged, falsified or improperly executed bidding or
contract related documents, or a person who has submitted false
documents.
1.11 Miscellaneous
1.11.1 Language: The bid proposal documents shall be prepared in English.

1.11.2 Disqualification of Bid or Bidder: Any of the following bids will not be accepted.

- Bid submitted by a company not qualified for participation in this bidding.

- Bid registered after the dead line time of bid documents or closing date/time
Designated by KOWEPO

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 - Bid which, as deemed by KOWEPO, deviates from the Bidding Instructions of
ITB
- Bid containing any changes whatsoever in the context or any additions to the
content of the attached Contract, which is not required by ITB.
- Two(2) or more Bids submitted by the same company in the same matters
1.11.3 Notice of Changes in the Bid

KOWEPO may notify Bidder of any amendment or changes to the ITB, if any, and
they will constitute a part of ITB.
1.11.4 Computation of Time

Unless otherwise specifically provided for in ITB, the time stated in number of
days and months, will include Saturday, Sunday and holidays, and in case that
any specific day falls on a Sunday or holidays, the day will be postponed to the
first following business day.
1.11.5 Confidentiality of Bidding

The prices in Bidder’s Price Proposal must be issued independently, without

consultation, communication, or agreement with any other Bidder or potential
Bidder.

The prices that have been quoted in the Bidder’s Price Proposal shall not been
disclosed knowingly by the Bidder and will not be disclosed knowingly by the
Bidder, directly, or indirectly, to any other Bidder or potential Bidder prior to the
time bids are due.

No attempt has been made directly or indirectly to induce any other person or
firm to submit or not to submit a Bid for the purpose of restricting competition.

1.11.6 Ownership of a bid

Bids and other documents submitted are the property of the KOWEPO and with
or without eligibility for bid they will not be returned to bidders.

1.11.7 Validity Period of Bid

The bid including the price shall be bound as a firm offer and valid for a period of
at least one (1) month after the Bid Closing Date. KOWEPO may request the
Bidder to extend the validity period of the bid, if necessary.
1.11.8 Application Law

The item which is not stated in this ITB will be applied Korea related law and
regulations.

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2.0 PREPARATION OF BID PROPOSALS
2.1 Qualifications of the Bidder
2.1.1 Biomass Fuel(Wood Pellet or Woody Biomass SRF(Pellet Type)) producers,
marketing companies or traders those who shall meet the whole requirements of
ITB, including but not limited to Biomass Fuel quality specifications, delivery
schedule, etc. are qualified to participate in ITB.

2.1.2 In the event of two or more bidders from same manufacturer, KOWEPO shall
accept the bidders’ volume only up to manufacturer’s production capacity. In this
case, the accepted bidder’s volume shall be given to the lowest price bidder. If the
first accepted volume does not reach the manufacturer’s production capacity, the
remaining volume of it shall be the maximum volume allowed for the next lowest
price bidder to supply.

2.1.3 If the Bidder has had any material unfaithful performance record in honoring
the contract with one of Korean five (5) Gencos (KOWEPO, KOEN, KOMIPO,
KOSPO, and EWP) KOWEPO shall have the right, at its sole discretion, neither to
allow its participation in this Bid nor to award the contract even if it is selected as
most competitive one. With regard to this, Bidders are deemed to agree not to
raise any claim against KOWEPO’s referring, if any, to other Gencos whether they
have any unfaithful track record.

2.1.4 After being awarded as a successful Bidder, if a successful Bidder fails to enter
into making a contract or fails to execute the contract signed, the Bidder will be
banned from participating in KOWEPO’s future BIOMASS FUEL purchasing tender
for at least 6 (six) months, which is the KOWEPO’s sole right and could not be
challenged under any circumstances.

2.2 Bid Bond

2.2.1 Bidders shall provide bid bond to KOWEPO no less than five (5) percent of the
total tender price based on DDP in any form of the following no later than bid
closing date. If not, KOWEPO has the right to disqualify the bid.

- Irrevocable stand-by letter of credit issued by a first-class bank with the

condition that a Korean Bank in Korea reissue Bank Guarantee under your
counter guarantee, in which case the L/C should be advised to KOWEPO
through KEB Hana Bank; or

- Bank guarantee or surety bond issued by a first-class bank, on condition that a

Korean Bank in Korea reissues the bank guarantee under your counter
guarantee; or

- A guarantee certificate issued by Guarantee Insurance Company

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2.2.2 The bid bond shall be payable unconditionally to KOWEPO at sight against the
KOWEPO’s simple request for payment in the event that:

- The Bidder withdraws its tender proposal before its expiration of validity; or

- The successful Bidder refuses to enter into the Contract

- The successful Bidder refuses to pay the performance bond within deadline

2.2.3 The bid bond shall be valid for at least two (2) month after the expiration of
validity of the tender proposal.

2.2.4 The deposit shall be returned without interest thereon;

- To an unsuccessful Bidder: within one (1) month after award of the Contract
or promptly after award of the Contract or promptly after rejection of the bid
proposal.

- To the successful Bidder: as soon as he establishes the performance bond.

2.3 Bid Documents

2.3.1 Bidder shall submit the bid documents on the bid closing. If not, KOWEPO has
the right to disqualify the bid. Bidder shall provide relevant supporting documents
including certificates, issued by the relevant authorities of the export country, to
demonstrate the legal status and current situation of the plant from which the
BIOMASS FUEL would be supplied. The relevant evidence documents should be in
English.

2.3.2 In all bidding documents, the name and signature should be the same as
representative’s. In the event of delegation of authority, the power of attorney
should be attached.

2.3.3 The documents to be submitted as follows:

No. Bid Documents Form Remarks

1 Bid Application B1

2 Recognition Form B2

3 Power of Attorney B3 ◦ In case of delegation of authority

4 Price Proposal B4 ◦ DDP only

5 Guaranteed Specification B5 ◦ attachment

- quality certification issued within 6 months
basis on Closing date by the Analyst
- quality certification issued and performed by
the Inspection Agency designated by the
enforcement decree of Act on the

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 Sustainable Use of Timbers (in case of Wood
Pellet)

6 Guaranteed Letter B6 ◦ Between Bidder and Biomass Fuel

(Wood Pellet & Bio-SRF) Producer(s)

7 Plant Information Sheet B7

8 Sales and Purchase Contract ◦ Direct contract between Bidder and Biomass
Fuel Producer(s)

9 Business License ◦ Both bidder and Producer(s)

10 Registration of Import ◦ Bidder

11 Bid bond ◦ The original copy

12 Certificate of Performance of B8 ◦ Issued by one of five (5) Korean Gencos

BIOMASS FUEL Supply Contract (KOWEPO, KOEN, KOMIPO, KOSPO and EWP)
including delivery quantity, delivery
schedule, delivery item and Seller’s name

13 Due Diligence Report ◦ in case of Woody Bio-SRF :

issued and performed within 6 months basis
on Bid Closing Date by ‘The Waste to Energy
Center, Korea Environment Corporation

14 Integrity Pact B9

☞ Please submit the bid documents in numerical order.

2.4 Submission of Bid Documents

The Bid documents shall be submitted by designated e-mail below not later than the
deadline.
E-mail : bidding@iwest.co.kr
The Bid documents(except for No.13 Due Diligence Report) which submitted by
personal e-mail or a method other than those noted above shall not be accepted.

2.5 Bid Closing Date

The bid documents shall be submitted no later than 14:00 11th September, 2018
(Korean Standard Time, Arrival time basis).

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3.0 EVALUATION OF BID
3.1 Non-disclose of bid evaluation
3.1.1 The result of KOWEPO’s evaluation is final and confirmed, KOWEPO is not obliged
to reveal the contents of bid evaluation.
3.2 Evaluation of Proposal
3.2.1 The Bid will be appraised by comparing the evaluated DDP prices submitted by
the Bidder in accordance with the following formula:

= [DDP price + Quality penalties + Power Constant] x (3,900 kcal/kg ÷ Bidder’s

Guaranteed Net Calorific Value based on as received basis)

- DDP Price shall be evaluated based on a additional tax (VAT) exemption.

- Quality penalties shall be quoted by the following formula;

· Sulphur penalty=USD 3.06/MT x Guaranteed Sulphur content (%)

· Ash penalty=USD 0.03/MT x Guaranteed Ash content (%)

· Nitrogen penalty=USD 0.17/MT x Guaranteed Nitrogen content (%)

· Power constant = USD1.63/MT

3.2.2 By examining the bid documents submitted, KOWEPO shall check the Bidder’s
qualification and the possibility and stability of BIOMASS FUEL supply.
Inappropriate or incomplete documents shall be rejected in the bid.

3.3 Conducting Due Diligences (in case of Wood Pellet)

3.3.1 In case of Wood Pellet only, KOWEPO will conduct an on-site investigation on,
but not limited to, the Wood Pellet production site, factory and loading port that
are designated by the successful Bidders (“Due Diligence”). Due Diligence shall be
performed as an essential bidding procedure in the selection of the party to
whom the Contract will be finally awarded.

3.3.2 KOWEPO will conduct Due Diligence and verify the successful Bidders’
conditions, such as reliability of supply, production capacity, conditions of
production facility, and transportation flexibility. The international independent
survey agency (Surveyor), which shall be appointed solely by KOWEPO, shall
perform the investigation. Costs incurred for Due diligence shall be borne by
Bidder. Due Diligence check-list is provided by Form 7 in PART B(BID FORMAT)

3.3.3 KOWEPO will, at its sole discretion, make a final decision on whether to select a
successful Bidder as the party to whom the Contract will be finally awarded,

13
 taking into consideration the result of Due Diligence. No objection to the decision
will be accepted.

3.3.4 In case the Bidder has had a successful record to meet the following conditions,
then KOWEPO may exempt conducting on-site inspection.

- The bidders who have had a track record of supplying not less than 10,000
tons of Wood Pellet Supply record to Korea’s power generation companies of
KOWEPO, KOEN, KOMIPO, KOSPO and EWP within the recent two (2) years
from the date of giving notice of this bid.

3.3.5 In case of Woody Biomass SRF, Due Diligence can be substituted by ‘Due
Diligence Report for BIO-SRF Processing Facility’ issued by KECO(Korea
Environment Corporation).

3.4 Selection of the Successful Bidders, Right of Rejection

3.4.1 According to the results of Clause 3-2 evaluation Methods, KOWEPO shall
select successful Bidders in the order of the lowest evaluated price until the
quantity amounts to target contract quantity of KOWEPO.

3.4.2 In the event that the successful Bidder’s price is in excess of the target price of
KOWEPO, KOWEPO may, in its sole discretion, decide not to select even the
lowest price Bidder as the successful contract party.

3.4.3 In these prices, if the last lowest Bidder’s quantity is in excess of the target
contract quantity of KOWEPO, the excessive quantity may be excluded from the
contract quantity.

3.4.4 In the event that there are two or more Bidders who proposed the same price,
the Bidder who proposed the largest quantity shall be selected as the successful
Bidder.

3.4.5 In the event that there are two or more Bidders who proposed the same price
as well as the same quantity, the Bidder who proposed the highest Net Calorific
Value BIOMASS FUEL will be selected as the successful Bidder

3.4.6 KOWEPO shall reserve the right, at any time without any liability, to reject any
part or all of the Bids for the best interests of KOWEPO.

3.4.7 No claim(s) from Bidders for compensation with regard to the rejection shall
be accepted by KOWEPO.

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3.5 Appointment of Contractors
3.5.1 Award notice shall be made after reaching an agreement on the Contract price
and delivery schedule adjustments between KOWEPO and the successful Bidder.
KOWEPO shall notify the awarded Bidder of award notice by written document
with KOWEPO’s signature.

3.5.2 The awarded bidders(Successful Bidders) shall sign a contract within fifteen
(15) calendar days after issued the award notice by KOWEPO.

3.6 Performance Bond

3.6.1 The awarded Bidder shall establish a performance bond in favour of KOWEPO,
within seven (7) days after receipt of the Price Term Notice from KOWEPO, after
an agreement on the Contract price and delivery schedule adjustments, in an
amount no less than ten percent (10%) of the contract price amount of the total
contract.

3.6.2 The performance bond shall be in the form of irrevocable clean letter of credit
or bank guarantee issued by a first class international bank, with the condition
that a KEB Hana Bank in Korea reissues a bank guarantee.

15
[PART - B] BID FORMAT

16
[B1] BID APPLICATION FORM

BID APPLICATION
(Bid No. KOWEPO-BIOMASS FUEL-2018-SP03)

Item / Quantity BIOMASS FUEL /

Bid closing date 14:00 PM, 11th September, 2018

We, , consent to all the contents of the above tender and hereby
apply for the above tender to supply BIOMASS FUEL to Tae-an Thermal Power Plant.

- Company Name :

- Business License No. :

- Date :

(1) Representative Name :

Signed by :
(Authorized Signature)

Tel No. :
Fax No. :

(2) Attorney Name : (in case of delegation of authority)

Signed by :
(Authorized Signature)

Title :
Tel No. :
Fax No. :

※ All signature in bidding documents should be same as above signature

17
[B2] RECOGNITION FROM

RECOGNITION FORM
(Bid No. KOWEPO-BIOMASS FUEL-2018-SP03)

Item / Quantity BIOMASS FUEL /

Bid Closing Date 14:00 PM, 11th September, 2018

We fully understand all terms and conditions and general

instruction of the above tender. We declare that we will take
responsibility for all of loss occurred by misunderstanding or not
complying with ITB

Company Name : 00
0000000
Signed by : 0
(Authorized Signature)
Name :
Title :
Telephone Number :0
Date :0000000000000000000000000

18
[B3] POWER OF ATTORNEY

POWER OF ATTORNEY
(Bid No. KOWEPO-BIOMASS FUEL-2018-SP03)

KNOW ALL MEN BY THESE PRESENTS;

We, , authorize the under mentioned person to represent
for the purpose of signing for above tender
◦ Date :

(1) Attorney

Signature : (Authorized Signature)

Name : (Printed Name)
Title :
Tel No/Mobile : /
Fax No. :
Email-Address :

We certify that we will take full responsibility for all acts performed by attorney.

(2) Representative

Signed by : (Authorized Signature)

Name : (Printed Name)
Title :
Tel No/Mobile : /
Fax No. :
Email-Address :

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 [B4] PRICE PROPOSAL (DDP BASIS)

PRICE PROPOSAL
(Bid No. KOWEPO-BIOMASS FUEL-2018-SP03)

To: Mr. Yong Yeon, Park / General Manager, Fuel Procurement Office
Korea Western Power Co., Ltd.

, the undersigned, hereby offers to supply BIOMASS FUEL for Tae-an

Power Plant in the amount of 400~650 MT daily, during the Contract period in accordance
with ITB .

Item : □ Wood Pellet / □ Woody Biomass SRF(Pellet Type) (Bidder’s Choice)

Origin/Manufacturer : /
Validity : Until

Price DDP USD per MT on kcal/kg NAR basis

Quantity Metric Ton

Delivery Schedule

Date :
Bidder :
Address :
Email-Address :
Tel No./Mobile : /
Fax No. :

Signed by : (Authorized Signature)

(Printed Name)
(Title)

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[B5] SPECIFICATION FORM

GUARANTEED SPEC
(Bid No. KOWEPO-BIOMASS FUEL-2018-SP03)
Item Unit Limit of Range Bidder's Guaranteed Quality

Diameter mm 6~8

Length mm ≤ 32

Unit Volume Mass (As Received Basis) kg/㎥ ≥ 550

Total Moisture (As Received Basis) % wt ≤ 10

Net Calorific Value (As Received Basis) kcal/kg ≥ 3,900

Ash (Air Dried Basis) % wt ≤ 3.0

Chlorine (Air Dried Basis) % wt < 0.05

Sulphur (Air Dried Basis) % wt ≤ 0.05

Nitrogen (Air Dried Basis) % wt < 0.7

Ash Fusion Temperature, IDT

℃ ≥ 1,150
(Reducing Atmosphere)

Hydrogen(Dry Basis) % wt -

Biomass(As Dry Basis) % wt ≥ 95

Hg ≤ 0.05

Cd ≤ 0.5

Pb ≤ 10

As mg/kg ≤ 1.0
Trace Element
Cr ≤ 10

Cu ≤ 10

Ni ≤ 10

Zn ≤ 100

Fines % wt < 2.0

DNA Test(Rice Husk) Negative

※ Each item above shall be determined in accordance with the Noficaon No. 2018-8 by Korea
Forest Research Institute along with Notification No. 2014-135 by Korea Ministry of
Environment and the standards approved and recognized by Analyst listed on KOLAS.

21
※Bidders are requested to submit the quality certification including the test results of all the items
above and on which the name of the local supplier shall be marked.

※ Bidders are requested to submit the quality cerficaon issued within 6 month basis on closing
date by the international independent inspection company(Analyst).

22
 [B6] GUARANTY LETTER (SAMPLE)

GUARANTY LETTER
(Bid No. KOWEPO-Biomass Fuel-2018-SP03)

We, (hereinafter the “Biomass Fuel producer”),

(“Bidder”), have entered into a Purchase & Sale Contract (Contract No. )
pursuant to which the supplier shall supply to the bidder the wood pellets for KOWEPO’s tender as
follows;

Item / Origin Wood Pellet or Bio-SRF /

Quantity / Quality(NAR) MT / kcal/kg
Production Capacity per month

We certify that we fully understand all terms and conditions of the above tender, and are pleased to
submit the guaranty letter.

We hereby guarantee that we will supply Biomass Fuel to Tae-an Thermal Power Plant without fail
during the term of contract if the Bidder is selected as a final successful bidder.

Additionally, we declare that we will supply good quality Biomass Fuel better than the purchasing
specifications stated in the above tender.

Biomass Fuel Producer Bidder

Signed by
(Authorized Signature)

Name

Title

Tel No.

Email Address

Date

23
 [B7] PLANT INFORMATION SHEET

KOWEPO-BIOMASS FUEL-2018-SP03

Plant Information Sheet

Bidder Name: Manufacturer □ Marketing Company □ Trader □
Item : Wood Pellet □ Woody Biomass SRF(Pellet Type) □
Country of Origin:
Manufacturer Name Parent Company
Plant Location Plant Address
Operation
Production Capacity /hour /year Storage Capacity
Plant Life /years Major Equipment
Raw materials for pellet Employee
Production : ('000 t) Domestic Export<Destined Country /Customer> Total
2017 (Actual)
2018 (Plan)
Transportation
Plant ⇒ Loading Facilities／Point
Km Hours
Km Hours
Loading Facilities ⇒ Loading Port
By (Barge) (Container) (Tonbag) etc. ( ) km Hours
Vessel Size DWt
Loading Port
Terminal Name / location
Storage Capacity 000 t
Distance from Plant DWT Draft Limit M
Unloading Port (in Korea)
Terminal Name / location
Storage Capacity 000 t
Distance from Storage Facility Km Hours
Storage Facility (in Korea)
Name / Location
Storage Capacity
Storage Method Tonbag Container bulk etc.
Equipment ex) Thermostatic equipment
Distance from Tae-an Power Plant km Hours by
Inland Transportaion (to Tae-an Power Plant)
Number of Trucks
Delivery Schedule

Signed by : (Authorized Signature)

(Printed Name)
(Title)

24
[B8] BID APPLICATION FORM

Certificate of Performance of BIOMASS FUEL Supply Contract

(Bid No. KOWEPO-BIOMASS FUEL-2018-SP03)

We,______________, do hereby certify that the information described below is true and
correct. We, also, do confirm to provide KOWEPO of relevant supporting documents if
KOWEPO requests any additional documents.

1. Buyer :
2. Seller :
3. Contract Date :
4. Supply Period :
5. Contract Volume :

Company Name : ___________________________

Signed by :__________________________
(Authorized Signature)
Name:
Title:
Date:

25
[B9] INTEGRITY PACT

INTEGRITY PACT
(Bid No. KOWEPO-BIOMASS FUEL-2018-SP03)

Understanding that transparent business management is a key factor to social development

and national competitiveness, and accordingly, being fully committing to the operation of
Integrity Pact System, in connection with the submit tender for Bid No. KOWEPO-BIOMASS
FUEL-2018-SP03, all personnel of our company and its sub-contractors hereby agree that:

1. In the process of tender, executing or performing a contract, the company shall not
offer any bribe, gifts, entertainment or any other undue benefits directly or indirectly to
related officials. In case it is proven that the company has violated any terms of this Integrity
Pact, the company shall accept and agree that it will be prohibited from submitting tenders
initiated by KOWEPO for 1 year from the date when the company was notified with the fact of
violation.
2. If it is proven or disclosed, in relation with a bid, execution or performance of
concluding or execution of a contract, that the company has engaged in bid-rigging activities
or offered bribes to related officials, the company shall accept and agree that the contract will
be cancelled if the contract has not been finalized, or all or part of the contract will be
terminated if the contract has come into effect and the company shall not raise a formal
objection as a civil or criminal case.
3. The company shall use its best effort to institute this Integrity Pact that bans bribery
and to establish a company regulation that prohibits any retaliatory acts toward anyone
reporting internal corruptions, that protects whistle blowers/that prohibits any retaliatory
acts toward whistle blowers.

The company shall comply with this Integrity Pact as a solemn oath made on the basis of
mutual trust and shall abide by this Integrity Pact as the special terms and conditions when
signing the contract. The company shall not file any civil or criminal appeals regarding
enforcement action resulting from no-compliance of any of the above terms.

Bidder : ___________________

Signed by : (Authorized Signature)

(Printed Name)
(Title)

26
[B10] SITE SURVEY FORM

Check Lists for Site Inspection

(Bid No. KOWEPO-BIOMASS FUEL-2018-SP03)

- Plant Name:
- Address:
- Date of inspection:
- Inspected by:
- Accompanied by:

1. General
Business license / Issue date / Address / Number
Issued by / Name of license/ copy of license attached

2. Administration
Registration of incoming goods / Registration of outgoing goods / Invoicing system
Documentation system / Quality Management (ISO) / Internal Audits
External financial audit (date) / Employee records (Child Labor, working hours)
Calibration records all equipment

3. Transportation
Way of transportation of goods / Contamination risk
Weigh bridge calibration records / Cleaning trucks(containers)

4. Production
Production records / Production speed / Efficiency / Risk of contamination
Safety / Hygiene / Production capacity / Supply Chain Control of Wood

5. Storage
Storage of raw materials / Storage of goods to be shipped / Risk of contamination
Risk of fire / Record keeping of incoming and outgoing / Security
Cleaning record / Hazard goods

27
[PART –C] CONTRACT

28
 BIOMASS FUEL
SALE AND PURCHASE CONTRACT(DRAFT)
(KOWEPO-BIOMASS FUEL-2018-SP03)

2018. 09.

BETWEEN

KOREA WESTERN POWER CO. LTD.

AND

[ ]

29
 BIOMASS FUEL SALE AND PURCHASE CONTRACT

This contract (“Contract”) is made on the day of , 2018 by and

between Korea Western Power Co. Ltd. (KOWEPO), a corporation organized and
existing under and by virtue of the laws of the Republic of Korea with its
principal office located at 285, Jungang-ro, Taean-eup, Taean-gun,
Chungcheongnam-do, Korea (hereinafter referred to as the “Buyer”)
and , with its principal office at
(hereinafter referred to as the “Seller”).

WITNESSETH

WHEREAS, Seller intends to sell certain quantities of BIOMASS FUEL to Buyer as

set forth herein: and WHEREAS, Buyer intends to purchase, for the use of co-
firing fuel at the thermal power plants of Buyer, certain quantities of BIOMASS
FUEL from Seller as set forth herein: NOW THEREFORE, the parties hereto agree
as follows.

30
 Table of Contents
ARTICLE

1. DEFINITIONS

2. QUANTITY

3. QUALITY

4. DETERMINATION OF QUANTITY AND QUALITY

5. REJECTION

6. PRICE

7. ADJUSTMENT OF THE PRICE FOR QUALITY

8. PAYMENT

9. DELIVERY

10. LIQUIDATED DAMAGES FOR DELAY AND

QUANTITY SHORTAGE

11. WARRANTIES WITH RESPECT TO QUALITY

12. PERFORMANCE BOND

13. FORCE MAJEURE

14. DISPUTE AND ARBITRATION

15. NOTICES

16. ASSIGHNMENT

17. WAIVIERS

18. EFFECTIVE DATE

19. ENTIRE AGREEMENT

31
1. DEFINITIONS
1.1. The following terms when used in Contract shall have the meanings as stated below
(and definitions of certain terms which are given in the preamble and in other articles
of Contract shall have the same meanings as those stated in this Article):

"BIOMASS FUEL" shall mean the Biomass Fuel(Wood Pellet or Woody Biomass
SRF(Pellet Type)) forested from .

"Wood pellet” is a product manufacturing through physical and chemical processing of

lumber (product of tree lumbering), or lumber and other materials, and refers to the
standardized woody solid biomass in the shape of a small cylinder manufactured
through compression molding of lumber uncontaminated by harmful substances
(National Forest Institute Announcement No. 2018-8).

"Biomass-solid refuse fuel (Bio-SRF)" refers to the product manufactured in the form
of pellet using combustible solid waste defined in the laws regarding resource saving
and recycling promotion enforcement regulation attachment1 No. 19 B, not the
designated waste defined in the Waste Control Act.

“Manufacturer” shall mean as follows ;

“DDP” shall refer to “Delivered Duty Paid (Incoterms 2010)” and mean completion of
the delivery by means of container trucks and discharging Biomass Fuel into certain
places designated by the Buyer at the Tae-an Power Plant.

“Tae-an” shall mean Tae-an Power Plant in Baljeon-ro, Wonbuk-myeon, Taean-gun,

Chungcheongnam-do, Korea.

“Surveyor” shall refer to the international independent survey agencies performing

vessel loading supervision on the BIOMASS FUEL plant site.

“Analyst” shall refer to the international independent inspection companies provide

services like laboratory testing, witnessing and certifying of the BIOMASS FUEL quality.

“KOLAS” shall mean Korea Laboratory Accreditation Scheme.

“Ton (s)” shall mean metric ton(s).

“USD, US$” shall refer to the lawful currency of the United States of America.

“Year” shall mean a calendar year starting from January 1 and ending on December 31

1.2. A fraction of a cent in any calculation shall be rounded up to a cent if such fraction is
one half of a cent or more, and shall be rounded down if otherwise.

1.3. A fraction of a ton in any calculation shall be rounded up to a ton if such fraction is one
half of a ton or more, and shall be rounded down if otherwise.

32
1.4. The Seller shall comply with all statutes, regulations, rules and orders made which
affect or relate to the sale and supply of the BIOMASS FUEL or performance of any
obligations under this Contract and any regulation of any local authority which has any
jurisdiction with regard to the Seller or the sale and supply BIOMASS FUEL.

1.5. The Seller is responsible for the Damage caused by the Buyer’s failure to comply with
‘the Act on the Sustainable use of Timbers’(in case of wood pellet), ‘the Act on the
Promotion of Saving and Recycling of Resources’, ‘the Act on the Promotion of the
Development, Use and Diffusion of New and Renewable Energy’ of Korean Laws and
the Subordinate Statute.

1.6. Seller’s Bid Documents(Bid No. KOWEPO Biomass Fuel-2018-SP03) are part of the
Biomass Fuel Sales and Purchase Contract.

2. QUANTITY
The quantity of BIOMASS FUEL [Wood Pellet or Woody Biomass SRF(Pellet Type)]
which is the object of the Contract shall be Tons plus or minus five(5)
percentages of tolerance.

3. QUALITY
3.1. The Seller warrants that the BIOMASS FUEL [Wood Pellet or Woody Biomass SRF(Pellet
Type)] supplied under this Contract shall be manufactured from wood fibre exclusively,
without any type of binder or other chemically treated biomass. Wood fibre is defined
as sawdust, shavings, round wood and bark from any species of woody plants.

3.2. The quality of BIOMASS FUEL to be supplied hereunder shall be as follows.

Item Unit Limit of Range Bidder's Guaranteed Quality

Diameter mm 6~8

Length mm ≤ 32

Unit Volume Mass (As Received Basis) kg/㎥ ≥ 550

Total Moisture (As Received Basis) % wt ≤ 10

Net Calorific Value (As Received Basis) kcal/kg ≥ 3,900

Ash (Air Dried Basis) % wt ≤ 3.0

Chlorine (Air Dried Basis) % wt < 0.05

Sulphur (Air Dried Basis) % wt ≤ 0.05

Nitrogen (Air Dried Basis) % wt < 0.7

Ash Fusion Temperature, IDT (Reducing

℃ ≥ 1,150
Atmosphere)

33
Hydrogen(Dry Basis) % wt -

Biomass(As Dry Basis) % wt ≥ 95

Hg ≤ 0.05

Cd ≤ 0.5

Pb ≤ 10

As mg/kg ≤ 1.0
Trace Element
Cr ≤ 10

Cu ≤ 10

Ni ≤ 10

Zn ≤ 100

Fines % wt < 2.0

DNA Test(Rice Husk) Negative

※ Each item above shall be determined in accordance with the Notification No. 2018-8 by Korea
Forest Research Institute along with Notification No. 2014-135 by Korea Ministry of
Environment and the standards approved and recognized by Analyst listed on KOLAS.

※ Bidders are requested to submit the quality certification issued within 6 month basis on closing
date by the international independent inspection company(Analyst).

4. DETERMINATION OF QUANTITY AND QUALITY

4.1. The determination of the quantity of BIOMASS FUEL delivered shall be made by the
truck scale weigher in the Tae-an which uses the weight differences between the full
loaded vehicle (before discharging BIOMASS FUEL) and the empty vehicle (after
discharging BIOMASS FUEL).

4.2. The inspection for BIOMASS FUEL quality analysis shall be performed at the unloading
port or domestic production facilities and the discharging area in Tae-an. The costs
required for these analysis and the determination of quality certification shall be borne
by the the Seller.

4.3. The inspection and procedures of sampling for BIOMASS FUEL quality analysis at the
unloading port or domestic production facilities shall be supervised by the Analyst
appointed by the Buyer through mutual agreement with the Seller. The quality result
of BIOMASS FUEL at the unloading port or domestic production facilities shall be
provisional. However, five (5) days prior to the delivery date at the discharging area in
Tae-an, the Seller should provide the Buyer with a copy of certificates of quality. The
Buyer may delay discharging BIOMASS FUEL until receipt of the certificate.

4.4. The procedures of sampling for BIOMASS FUEL quality analysis at the discharging area
in Tae-an shall be performed by the person or persons appointed by the Buyer. The
inspection shall be the final determination of BIOMASS FUEL quality and performed by

34
 Analyst accredited by KOLAS. The Buyer shall appoint one of them through mutual
negotiation with the Seller. The result of the inspection at the Tae-an shall be the basis
of the payment of BIOMASS FUEL.

4.5. During the discharging BIOMASS FUEL, sampling is performed in each container trucks
at random. Quality inspection shall be performed for every 5,000MT up to total
purchasing quantity pursuant to Article 2. The representative sample shall be divided
into four (4) parts for the following purposes;

- One sample for Analyst

- Two samples for the Buyer and the Seller

- One sample for the umpire

The sample for Analyst will be sent to the Analyst by carrier or other ways agreed by
the parties hereto through a necessary arrangement. The umpire sample shall be
retained by the Analyst in a suitable airtight container properly sealed and labeled
until sixty (60) days after issued the certificates of the quality.

4.6. In the event that the Buyer or Seller wishes to challenge the result of any analysis
made at the discharging area, the one umpire sample shall be promptly delivered to
and analyzed by other Analysts. In such case, the umpire sample shall be sent to a
Analyst appointed by the mutual agreement, the result of which will finally determine
the quality of the delivery in question based upon the umpire sample. The costs
required for such further analysis shall be borne by the challenging party.

4.7. The Buyer shall have the right to appoint representative(s) or itself to attend and
observe the procedures for determination of the quantity and/or quality of BIOMASS
FUEL at the unloading port or domestic production facilities and laboratory at any time
at the expense of the Buyer.

4.8. The price for every quantity of 5,000MT delivered shall be calculated based on the
quality certificate issued pursuant to Article 4 and the Seller shall issue an invoice to
the Buyer based on such price. The cost of analysis required for the quality analysis
shall be borne by the Seller.

5. REJECTION
5.1. If the quality of loaded BIOMASS FUEL as determined pursuant to the quality analysis
at the unloading port or domestic production facilities pursuant to Article 4 is outside
the limits of the range as specified in the Article 3, the Buyer shall have the right to
reject such inferior BIOMASS FUEL.

5.2. In the event that the result of quality analysis at the discharging area and laboratory
pursuant to Article 4 is outside the limit of range as specified in Article 3, the Buyer
shall have (in addition to other rights the Buyer may have under this Contract and by

35
 operation of the law) the right to reject such inferior BIOMASS FUEL. However, the
Buyer will accept the BIOMASS FUEL if the Buyer judges that BIOMASS FUEL can be
used by the Buyer and if both parties reach an agreement to a price adjustment
thereof.

5.3. All costs and responsibility incurred to the Buyer and the Seller as a result of the
rejection of BIOMASS FUEL pursuant to Article 5.1 shall be borne by the Seller.

5.4. In the event that a shipment of Biomass Fuel at the DDP Point fails to meet the
minimum/maximum range of the Specifications set forth in Article 3.2, in addition to
other remedies available to the Buyer, the Buyer shall have the right to terminate and
disqualify the supplying Biomass Fuel forest from the Buyer's spot Biomass Fuel open
tender(s) in accordance with any applicable Law, subject to the Seller's receipt of the
Buyer's notice of the said disqualification.

6. PRICE (DDP)
The Base Price of BIOMASS FUEL supplied under this Contract shall be US$ per
ton based on DDP at Tae-an kcal/kg net calorific value on as received basis.

7. ADJUSTMENT OF THE PRICE FOR QUALITY

7.1. The price of Article 6 shall be adjusted by increase and/or decrease pursuant to
Section 7.2 ~ 7.6 so that the price per Ton payable by Buyer to Seller for each delivery
shall be determined.

7.2. Net Calorific Value (as received basis)

There shall be no adjustment so long as the certified net calorific value (NCV) of
BIOMASS FUEL is not less than (Guaranteed Specification stipulated in Part 3.0 of Part
B for NCV-50) kcal/kg and not more than (Guaranteed Specification for NCV+50)
kcal/kg.

In the event the certified net calorific value of BIOMASS FUEL is less than (Guaranteed
Specification for NCV-50) kcal/kg, the price per Ton shall be reduced by the amount
calculated by the following formula

(Amount of reduction) =

Guaranteed Specification for NCV - Y

DDP price × 0.8 × -- ---------------------------------------------------- × Penalty
Guaranteed Specification for NCV

In the above formula, "Y" shall refer to the certified net calorific value on an as
received basis of BIOMASS FUEL as determined under Article 4.

36
 In the above formula, the "Penalty" shall be determined by the table below:
50< (Guaranteed Specification for NCV – Y) <=150 Penalty = 2.0

150< (Guaranteed Specification for NCV – Y) <=250 Penalty = 2.5

250< (Guaranteed Specification for NCV – Y) <=350 Penalty = 3.0

350< (Guaranteed Specification for NCV – Y) <=450 Penalty = 3.5

450< (Guaranteed Specification for NCV – Y) <=550 Penalty = 4.0

550< (Guaranteed Specification for NCV – Y) <=650 Penalty = 4.5

In the event the certified net calorific value of BIOMASS FUEL is in excess of
(Guaranteed Specification for NCV+50) kcal/kg, the price per ton shall be increased by
the amount calculated by the following formula:

(Amount of increase) =

Y- Guaranteed Specification for NCV

DDP price × 0.8 × ---------------------------------------------------- × 0.5
Guaranteed Specification for NCV

In the above formula, "Y" shall refer to the certified net calorific value on an as
received basis of BIOMASS FUEL as determined under Article 4.

7.3. Sulphur (air dried basis)

In the event the certified total Sulphur content exceeds Guaranteed Specification for
Sulphur, the price per ton shall be reduced by the amount calculated by the following
formula:

Y- Guaranteed Specification for Sulphur

3% of the (DDP price × 0.8) × ----------------------------------------------------
0.1%

In the above formula, "Y" shall refer to the certified total Sulphur content on an as air
dried basis of BIOMASS FUEL as determined under Article 4.

7.4. Ash (air dried basis)

In the event the certified total ash content exceeds Guaranteed Specification for Ash,
the price per ton shall be reduced by the amount calculated by the following formula:

Y- Guaranteed Specification for Ash

3% of the (DDP price × 0.8) × ---------------------------------------------------
1.0%

37
 In the above formula, "Y" shall refer to the certified ash content on an air dried basis of
BIOMASS FUEL as determined under Article 4.

7.5. Ash Fusion Temperature, IDT (reducing atmosphere)

In the event the certified Ash Fusion Temperature, IDT is lower than Guaranteed
Specification for Ash Fusion Temperature, IDT, the price per ton shall be reduced by
the amount calculated by the following formula:

(Amount of reduction) =
Guaranteed Specification for IDT-Y
2% of the (DDP price × 0.8) × --------------------------------------------------
10°C

In the above formula, "Y" shall refer to the certified Ash Fusion Temperature of
BIOMASS FUEL as determined under Article 4.

7.6. Nitrogen(air dried basis)

In the event the certified total Nitrogen content exceeds Guaranteed Specification for
Nitrogen, the price per ton shall be reduced by the amount calculated by the following
formula:

Y- Guaranteed Specification for Nitrogen

3% of the (DDP price × 0.8) × -------------------------------------------------------
0.6%

In the above formula, "Y" shall refer to the certified Nitrogen content on an air dried
basis of BIOMASS FUEL as determined under Article 4.

8. PAYMENT
8.1. Unless otherwise agreed between the parties hereto, any and all payments by Buyer to
Seller shall be made in USDs for each 5,000 Metric Tons of BIOMASS FUEL, and the
payable amount shall be calculated as follows.

The price of BIOMASS FUEL for each Ton:

The price in USD fixed pursuant to the provisions of Article 4 (Determination of

Quantity and Quality), Article 6 (Price) and Article 7 (Adjustment of the Price for
Quality); and

Quantity to be paid:

The quantity determined pursuant to the provisions of Article 4 (Determination of

Quantity and Quality)

38
 The price amount payable in US$ for a delivered quantity :

The price of BIOMASS FUEL for each Ton multiplied by the quantity to be paid and
deducted liquidated damages price amount.

8.2. In the event that the Buyer and the Seller agreed between the parties and the contract
terms is DDP basis hereto, any and all payments by the Buyer to the Seller shall be
made in KRW for each 5,000 Metric Tons of BIOMASS FUEL, and the payable amount
shall be calculated as follows:

The price of BIOMASS FUEL for each Ton

The price in US$ fixed pursuant to the provisions of Article 4 (Determination of

Quantity and Quality), Article 6(Price) and Article 7(Adjustment of the Price for
Quality); and

Quantity to be paid

The quantity determined pursuant to the provisions of Article 4(Determination of

Quantity and Quality); and

The price amount payable in US$ for a delivered quantity

The price of BIOMASS FUEL for each Ton multiplied by the quantity to be paid and
deducted liquidated damages price amount

8.3. Buyer shall make the payment terms with Telegraphic Transfer (T/T) basis. Such
payments shall apply to the total amount of BIOMASS FUEL delivered and fully
discharged at the place designated by the Buyer. Payments shall be made by means of
remittance to the bank account nominated by the Seller within seven (7) Korean bank
working days after receiving following documents.

- Commercial Invoice signed by Seller, indicating the basis of the calculation of

the payable amount in duplicate(in the event that the Seller is domestic
company, including the bill or tax invoice), In the event that payments shall be
made in KRW pursuant to Article 8.2, Bill or Tax Invoice signed by the Seller,
indicating the basis of the calculation of the payable amount in duplicate;

- Certificate of quantity (including weight survey report), Certificate of quality in

accordance with Article 4 (Determination of Quantity and Quality) of the
Contract.

- Other documents requested by the Buyer for the payments

8.4. All banking charges in connection with the remittance as set out herein shall be for the
account of Buyer. All banking charges including acceptance commission incurred at
Seller’s drawing bank shall be for the account of Seller.

8.5. In the event that the Seller deliver on terms of DDP and Wood Pellet basis, within
three (3) working days after the issuance of the Bill of Lading at the Loading Port, the
39
 Seller shall promptly notify to the Buyer the following documents by telex, facsimile of
cable.
- Import Permit issued by the local Ministry of Environment
- Full set of negotiable clean ‘on board’ ocean Bills of Lading certifying the
loading of Wood Pellet in the quantity as stated in the Certificate of Quantity
issued pursuant to Article 4
- Certificate of Origin
- Certificate of Quality issued and performed by the Inspection Agency
designated by the enforcement decree of Act on the Sustainable Use of
Timbers
- Performing Vessel’s ETD(estimated time of departure), ETA(estimated time of
arrival)
- A Permit for felling issued pursuant to the statutes of the country of origin or
any other documents prescribed and publicly notified by the Minister of the
Korea Forest Service which verify that the relevant timber or timber product
has been legally felled, etc(by the enforcement decree of Act on the
Sustainable Use of Timbers)
- Other documents requested by the Buyer.

In the event that The Seller fails to submit above documents or The Seller and the
obligator of tax payment in the import permit are not identical, The buyer shall delay
discharging BIOMASS FUEL.

8.6. In the event that the Seller deliver on terms of DDP and Woody Biomass SRF(Pellet
Type) basis, the Seller shall submit the Buyer at least three (3) days prior to arrival at
Tae-an the following documents.
- Import Permit issued by the local Ministry of Environment
- Import License issued by Customs
- Bills of Landing
- Certificate of Origin
- Fumigation Certificate at the unloading port
- Quality test report issued within 6 months under ‘the Act on the Promotion of
Saving and Recycling of Resources’ of Korean Laws(if expired during delivery,
must submit updated Quality test report)
- Performing Vessel’s ETD(estimated time of departure), ETA(estimated time of
arrival)
- Other documents requested by the Buyer.

In the event that The Seller fails to submit above documents or The Seller and the
obligator of tax payment in the import permit are not identical, The buyer shall delay
discharging BIOMASS FUEL.

8.7. The buyer shall refuse the payment in case the documents proposed in Article 8.5 or
Article 8.6 are not furnished or falsely furnished when the seller requests payment,

40
 and when the documents submitted by the seller is found to be false, the participation
in bidding for KOWEPO biomass will be banned for 1 year based on Article 76 of Act on
contracts to which the states is a party.

9. DELIVERY
9.1. BIOMASS FUEL shall be delivered to Tae-an on terms DDP basis. The Seller shall
arrange all the relevant vehicles and facilities till completing discharging BIOMASS
FUEL at the designated area in Tae-an. For the stability of supply, the Bidder may use
more than one transportation company. The Seller shall deliver BIOMASS FUEL to the
designated area in Tae-an within the delivery schedule.
Daily Delivery Quantity 400 ~ 650MT

Delivery Schedule 21st September, 2018 ~ 31st December, 2018

9.2. The Seller has to deliver BIOMASS FUEL in forms of bulk each day in container trucks
to certain places designated by the Buyer in Tae-an pursuant to Article 9.1. The Seller
shall indicated the preferred delivery date and daily delivery quantity for contract. The
Buyer may refer to the Bidder’s preferred delivery date and daily delivery quantity,
however, the Buyer will not be obliged to take the Seller’s preferred delivery date and
daily delivery quantity into consideration when deciding the exact delivery date and
daily delivery quantity for contract, and will be free to designate the delivery date and
daily delivery quantity for contract in light of the Buyer’s own needs.

9.3. The Buyer may advance or postpone the delivery date by a maximum of fourteen (14)
days through a written notice three (3) weeks before the commence of the original
delivery date through telex, facsimile, cable, radio or e-mail. However, the Buyer shall
not liable for any change in the delivery date. If the Seller needs to change the delivery
date, the Seller shall obtain prior agreement from the Buyer.

9.4. The Seller shall give the Buyer at least seven (7) days prior to notice of the estimated
time of arrival (ETA) of container trucks at Tae-an.

9.5. Any expenses incurred in transporting and discharging shall be borne by the Seller. In
addition, any civil complaint incurred in delivery, including damages due to dust
particles arising from such delivery, shall be borne by the Seller.

10. LIQUIDATED DAMAGES FOR DELAY AND QUANTITY SHORTAGE

10.1. If the Seller fails to deliver to places as stipulated in the Article 9 within the delivery
date, Seller may deliver such delivery within the immediately succeeding fourteen (14)
day period, in which case the Seller shall pay the Buyer liquidated damages. The
liquidated damages calculated by the following formula;

(liquidated damages) = The Price( DDP) × Delay Date × Delay Quantity × 0.075%
In the above formula, “The Price” set forth in Article 6.

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10.2. If Seller fails to deliver the late delivery within such fourteen (14) day period, Buyer
shall have the right to terminate or cancel the Contract without further liability,
holding Seller responsible for all resulting damages. If Buyer elects to grant Seller
additional time within which to deliver the BIOMASS FUEL, Seller shall deliver the
BIOMASS FUEL within such period and shall pay Buyer liquidated damages for the total
period of delay. If such extension is granted by Buyer, the Contract and the date of
expiry of Seller's performance bond associated with the delayed delivery shall be
extended correspondingly. If Seller fails to deliver the BIOMASS FUEL within the
extension period, Buyer shall have the right to terminate or cancel the Contract
without further liability, holding Seller responsible for all resulting damages.

10.3. If the delivered quantity of BIOMASS FUEL, which is determined pursuant to Article 4,
fails to meet the Contract quantity, in addition to other remedies available to the
Buyer, Seller shall pay Buyer liquidated damages for quantity shortage as follows:

The Price( DDP) × the Contract quantity × 20%

the Contract quantity – the delivery quantity

× ----------------------------------------------------------
the Contract quantity

10.4. Buyer shall be entitled to deduct the amount of liquidated damages payable to it
under this Article from any amount payable by it to Seller under the Contract and/or to
draw against the performance bond an amount not to exceed the amount of such
liquidated damages.

11. WARRANTIES WITH RESPECT TO BIOMASS FUEL QUALITY

11.1. Seller shall supply the BIOMASS FUEL of quality in accordance with the provisions of
the Contract and the Seller warrants that:

The BIOMASS FUEL supplied shall be manufactured from wood fibre exclusively,
without any type of binder or other chemically treated biomass

In order to prevent degradation of the BIOMASS FUEL Seller is to ensure that loading
is carried out as soft loading.

Each delivery of BIOMASS FUEL shall be of good grade meeting the requirements
referenced in Article 3 (Quality).

Seller shall guarantee that raw material used for the production of BIOMASS FUEL,
under Contract, where all aspects comply with approved and sound environment
practices.

11.2. Buyer shall appoint an Analyst to determine the BIOMASS FUEL qualities at discharging
area. All expenses relating to such survey shall be for the account of and paid for by
the Seller. The determination of the Analyst shall be final, conclusive and binding on

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 both parties. In addition to remedies available to Buyer, Sellers shall pay Buyer
liquidated damages for time loss at Tae-an caused by the contamination or stickiness
of BIOMASS FUEL.

11.3. Seller shall be liable to Buyer for excessive cost caused by Seller's breach, except as
contemplated by Article 13 (Force Majeure), including but not limited to liability and
expense incurred by Buyer with respect to the transportation or other handling
process of BIOMASS FUEL.

12. PERFORMANCE BOND

Unless otherwise agreed between Seller and Buyer, Seller shall establish a
performance bond in favour of Buyer within seven (7) days after receipt of the Price
Term Notice from Buyer after an agreement on the Contract price and delivery
schedule adjustments in an amount not less than ten percent (10%) of the price
amount of Contract. The performance bond should be in the form of irrevocable clean
letter of credit or bank guarantee with confirmation of a commercial bank acceptable
to Buyer. (form: attached)

12.1. The performance bond shall be valid from the date of its establishment until two (2)
months after the date of discharging of each delivery as stipulated in the Contract. If
Buyer has any claim against Seller which is not settled within the validity of the
performance bond, Seller shall cause the issuing bank of that clean letter of credit to
confirm to Buyer, not later than five (5) days before the date of expiry of that letter of
credit, of the extension of the validity of that letter of credit for such period of time as
required by Buyer. If the Seller's clean letter of credit is not so extended, Buyer may
draw the full amount of that said such letter of credit.

12.2. In the event of Seller's default in the performance of its obligations under the Contract,
Buyer may draw such amount under the performance bond if Buyer judges it is
necessary to compensate Buyer for its losses, damages, expenses or other costs (or
any part thereof) arising from or related to Seller's default.

12.3. Buyer will release each performance bond, without interest, after the expiration of the
validity of the performance bond or after Seller has completed delivery of BIOMASS
FUEL at Tae-an Power Plant, provided that Buyer is satisfied that BIOMASS FUEL is in
accordance with all the requirements of the Contract.

12.4. If Seller fails to establish the performance bond required hereunder to be deposited
within the required period stipulated above, Buyer shall have the right to cancel the
Contract.

12.5. A sample performance bond is as set forth below:

-----------------------------------------------------------------------------------------------------------------------------
Sample Performance Bond

Please advise the following performance bond with confirmation of a commercial bank.
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Quote
Issuing Date:
To: Korea Western Power Co., Ltd.
We hereby issue our irrevocable letter of guarantee No...... in your favor for account of
contractor up to an aggregate amount of US$........ (Say US Dollars...........only) as a
performance bond in accordance with the terms and conditions of the tender for the
(Contract No.)

This guarantee shall be available upon receipt of your first demand either by your Bank's
authenticated swift message accompanied by your declaration stating that the amount
claimed is due by reason of the contractor having failed to perform the work.

This guarantee will expire on (expiry date) and any claims must be received by us in writing on
or before (expiry date plus 20 days mailing period), after which date this guarantee will
become null and void whatsoever whether the letter of guarantee is returned to us or not.

Unquote

This message is the operative instrument.

-----------------------------------------------------------------------------------------------------------------------------

13. FORCE MAJEURE

13.1. Seller shall not be liable to Buyer nor shall Buyer be liable to Seller for any delay,
interruption or failure in the performance of obligations if such delay, interruption or
failure is due to or results from fire, flood, wars, blockades, prohibition of exports or
imports, act of God or any other contingencies beyond the Parties control or
governmental control on the generation of electricity as the case may be.

13.2. In the event that any conditions of force majeure occur or are likely to occur, the party
directly affected shall promptly notify the other party by mail, facsimile or cable to be
followed by a written notice setting forth the particulars of the relevant event with
supporting evidence. The party so affected shall take all reasonable steps to remove
the conditions of force majeure, with the least possible delay, in compliance with its
obligations under this Contract.

13.3. If no consultation is made within seven (7) working days or no agreement is reached
between the parties within twenty one (21) days of such request being made, then the
performance of this Contract by the party giving the notice shall be suspended for the
duration of and insofar as the same affected by disability resulting from such Force
Majeure and the party giving the above mentioned notice shall not be liable for delay
or failure in performance of the relevant provisions of this Contract for such duration.
If any contingency persists as a period ninety (90) days or more either party may
cancel any fulfilled orders affected by such delay without any liability to the
Seller/Buyer.

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14. TRANSFER OF TITLE AND RISK
14.1. The delivery of BIOMASS FUEL shall be deemed to have been sold and delivered to the
Buyer after completing delivery to Tae-an. Title and risk of loss or damages thereto
shall pass to the Buyer as the BIOMASS FUEL is discharged in Tae-an.

14.2. In the event that a delivery of BIOMASS FUEL is rejected in accordance with Article 5,
the title of that BIOMASS FUEL and the risk of loss or damages thereto shall pass back
to the Seller upon the Buyer's notice

15. DISPUTE AND ARBITRATION

All disputes, controversies, or differences which may arise between the parties, out of,
or in relation to or in connection with this Contract, or for the breach thereof shall be
finally settled by arbitration in Seoul, Korea in accordance with The Commercial
Arbitration Rules of The Korean Commercial Arbitration Board and under the laws of
Korea. The award rendered by the arbitrator(s) shall be final and binding upon both
parties concerned.

16. NOTICE
All notices, requests, demands, and other communications hereunder shall be in
writing, and shall be deemed to have been duly given upon delivery to the party to be
notified if delivered by personnel or registered airmail, or at the date of dispatch for
notices by telex, facsimile, cable or radio unless otherwise expressly provided for in
this Contract.

If the notice is to the Buyer, to:

Fuel Procurement Office
Korea Western Power Co., Ltd.
Attention : Mr. Yong Yeon, Park / General Manager
Address: 285, Jungang-ro, Taean-eup, Taean-gun, Chungcheongnam-do 32140, Korea
Fax No.: 82-41-400-1507/8

If the notice is to the Seller, to: _______________________

Attention: _________________________
Address: __________________________
Fax No.: ___________________________
The address or facsimile number may be changed from time to time; such changes are
to be notified in writing.

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17. Termination
17.1. In the event that the Seller commits any breach of its undertaking hereunder so as to
prevent completion of the Seller’s obligations under this Contract, then the Buyer may,
by giving written notice to the Seller, terminate this Contract without any liability or
charge to the Buyer.

17.2. Termination of this Contract shall be without prejudice to the accrued rights and
obligations of the Parties hereunder.

18. Assignment
18.1. Neither party shall assign this Contract in whole or in part without written consent of
the other party, which consent shall not be unreasonably withheld. Neither party may
assign any moneys due or to become due hereunder to a third party without the
written consent of the other party, which consent shall not be unreasonably withheld.
This Contract shall be binding upon and shall inure to the benefit of the legal
representatives and successors of the parties hereto.

Any purported assignment by either party without said written consent by the other
party shall be void and of no effect.

18.2. Any assignment pursuant to Article 17.1 shall not take effect until the assignee has
executed in favor of the other party hereto a deed of covenant in a form approved by
such other party to comply with, observe, and perform the provisions of this Contract
in regards to the subject of the assignment.

19. Waivers
The failure of either party to enforce at any time any of the provisions of this Contract,
or to require at any time performance by the other party of any of the provisions
hereof, shall in no way be construed to be a waiver of such provision, nor in any way to
affect the validity of this Contract or any part hereof, or the right of either party
thereafter to enforce each and every provision. Notwithstanding the above, the
parties may modify or amend any provisions of the Contract if in writing and signed by
both parties.

20. EFFECTIVE DATE

This Contract shall be effective and executed as from the date the authorized
representatives of both parties have signed.

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21. ENTIRE AGREEMENT
This Contract contains the entire agreement and understanding between the parties as
to the subject matter of the Contract, and merges and supersedes all prior agreements,
commitments, representations, writings, and discussions between them. Neither of
the parties will be bound by any other prior obligations, conditions, warranties, or
representations with respect to the subject matter of this Contract.

IN WITNESS WHEREOF, the parties hereto have caused this CONTRACT to be

executed by their respective duly authorized representative as of the day and
year first above written.

BUYER : SELLER :
Korea Western Power Co., Ltd.

Signed : Signed :
by By
Name : Name :

Title : Title :

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