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WHEREAS, pursuant to Section 2, Article XII, of the 1987 Philippine Constitution, all
forces of potential energy and other natural resources within the Philippine territory belong
to the State and their exploration, development and utilization shall be under the full
control of the State;
WHEREAS, under Section 2 of Republic Act (RA) No. 7638, as amended, otherwise
known as the "Department of Energy Act of 1992," the Department of Energy (DOE) is
mandated to prepare, integrate, coordinate, supervise and control all plans, programs,
projects and activities of the Government relative to energy exploration, development,
utilization, distribution and conservation, among others;
WHEREAS, Section 5 (b) of the same Act empowers the DOE to develop and update
the existing Philippine energy program which shall provide for an integrated and
comprehensive exploration, development, utilization, distribution and conservation of
energy resources, with preferential bias for environment-friendly, indigenous, and low-cost
sources of energy, and which program shall include a policy direction towards the
privatization of government agencies related to energy, deregulation of the power and
energy industry and reduction of dependency on oil-fired plants;
WHEREAS, Section 2 of RA No. 9136, otherwise known as the "Electric Power
Industry Reform Act of 2001" or "EPIRA," declares that it is the policy of the State to,
among others, (i) ensure and accelerate the total electrification of the country; (ii) enhance
the inflow of private capital and broaden the ownership base of the power generation,
transmission and distribution sectors; (iii) assure socially and environmentally compatible
energy sources and infrastructure; and (iv) promote the utilization of indigenous and new
and renewable energy resources in power generation in order to reduce dependence on
imported energy;
WHEREAS, Joint Administrative Order (JAO) No. 2008-1, Series of 2008, otherwise
known as the "Guidelines Governing the Biofuel Feedstocks Production, and Biofuels and
Biofuel Blends Production, Distribution and Sale," provides for the accreditation of biofuel
producers, among others, under RA No. 9367, otherwise known as the "Biofuels Act of
2006"; HTcADC
8.1. The RE Developer shall be given a period of seven (7) years from the date of
effectivity of the GSC to determine the existence of geothermal resources in
Commercial Quantities.
8.2. The GSC shall have a term of twenty-five (25) years, which shall include the
Pre-Development Stage, from the date of its effectivity. The
Development/Commercial Stage shall commence upon the issuance of the
COCOC by the DOE prior to the expiration of the Pre-Development Stage, and
shall continue for the remainder of the twenty-five (25)-year period of the GSC
term in accordance with the timeline set in the approved Work Program. The
GSC may be renewed for another twenty-five (25) years, subject to terms and
conditions provided therein.
SECTION 9. Solar Energy Resource. — The development of solar energy resources
shall be covered by a Solar Energy Operating Contract (SEOC) following the prescribed
template (Annex C).
9 1. The Work Program depends on the type of development, whether the RE
Project is mounted, roof-top, or floating.
9.2. The RE Developer shall be given a period of five (5) years from the date of
effectivity of the SEOC to achieve Commercial Operations of the RE Project. The
SEOC shall have a term of twenty-five (25) years from the date of its effectivity
and may be renewed for the same period, subject to terms and conditions
provided therein.
SECTION 10. Hydropower Resource. — The development of hydropower resources
shall be covered by a Hydropower Service Contract (HSC) following the prescribed
template (Annex D).
10.1. The RE Developer shall be given a period of five (5) years from the date of
effectivity of the HSC to determine the existence of hydropower resource in
Commercial Quantities.
10.2. The HSC shall have a term of twenty-five (25) years, which shall include the
Pre-Development Stage, from the date of its effectivity. The
Development/Commercial Stage shall commence upon the issuance of the
COCOC prior to the expiration of the Pre-Development Stage, and shall continue
for the remainder of the twenty-five (25)-year period of the HSC term in
accordance with the timeline set in the approved Work Program. The HSC may
be renewed for another twenty-five (25) years, subject to terms and conditions
provided therein.
SECTION 11. Ocean Energy Resource. — The development of ocean energy
resources shall be covered by Ocean Energy Service Contract (OESC) following the
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prescribed template (Annex E).
11.1. The Work Program depends on the type of development, whether the RE
Project is tidal stream/tidal current, tidal range, wave, ocean thermal or salinity
gradient.
11.2. The RE Developer shall be given a period of seven (7) years from the date
of effectivity of the OESC to determine the existence of ocean energy resource
in Commercial Quantities.
11.3. The OESC shall have a term of twenty-five (25) years, which shall include
the Pre-Development Stage, from the date of its effectivity. The
Development/Commercial Stage shall commence upon the issuance of the
COCOC prior to the expiration of the Pre-Development Stage, and shall subsist
for the remainder of the twenty-five (25)-year period of the OESC term in
accordance with the timeline set in the approved Work Program. The OESC may
be renewed for another twenty-five (25) years, subject to terms and conditions
provided therein.
SECTION 12. Wind Energy Resource. — The development of wind energy
resources shall be covered by Wind Energy Service Contract (WESC) following the
prescribed template (Annex F).
12.1 The RE Developer shall be given a period of five (5) years from the date of
effectivity of the WESC to determine the existence of wind energy resource in
Commercial Quantities.
12.2. The WESC shall have a term of twenty-five (25) years, which shall include
the Pre-Development Stage, from the date of its effectivity. The
Development/Commercial Stage shall subsist for the remainder of the twenty-
five (25)-year period of the WESC term in accordance with the timeline set in
the approved Work Program. The WESC may be renewed for another twenty-
five (25) years, subject to terms and conditions provided therein.
CHAPTER IV
Procedure for RE Contracts under Open and Competitive Selection Process
SECTION 13. Open and Competitive Selection Process (OCSP). — Interested
parties may apply for RE Contracts for PDAs offered by the DOE during a prescribed period
(Annex G).
13.1. Selection of PDAs. — Within six (6) calendar months following the effectivity
of this Circular and every year thereafter, the REMB shall identify and submit a
list of PDAs for RE Application, with the respective location maps and technical
descriptions thereof, to the DOE Secretary, through its Supervising Assistant
Secretary and Undersecretary, for approval. AIDSTE
13.2. Launch and Publication. — PDAs approved by the DOE Secretary shall be
scheduled for launch and shall be publicly announced by the DOE for
submission of RE Applications. PDAs for offer shall be published for at least
once (1) a week for two (2) consecutive weeks in at least two (2) newspapers of
general circulation and shall likewise be posted at the DOE website.
13.3. Data Packages and Promotional Activities. — The REMB shall arrange for the
availability of data packages for the approved PDAs that can be purchased by
interested parties in support of their applications. The REMB shall conduct
promotional activities to promote the OCSP and the corresponding data
packages so as to ensure maximum participation and awareness of prospective
investors and stakeholders.
13.4. RE Contract Application. — Applications may be submitted a day after the
publication date until the last day of submission which shall be sixty (60)
calendar days from the date of first publication in accordance with the following
requirements:
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13.4.1. The RE Applicant shall submit to the DOE a Letter of Intent (LOI)
following the prescribed format (Annex H) together with the RE
Application in accordance with prescribed Checklist of Requirements
(Annex I);
Each RE Application shall cover only one PDA as published.
13.4.2. The RE Application must be in both paper and electronic (flash drive
in Portable Data Format) copies, which shall use Times New Roman in 12-
point font size, and employ single line spacing. Figures and maps shall be
printed and submitted in a document that is not smaller than A3 size. For
legibility, figures and maps shall be submitted at a larger scale (1:10,000)
as appendices;
13.4.3. An application fee shall be paid by each RE Applicant, along with the
submission of RE Application. All payments may be made in cash,
manager/company cheque, payable to "Department of Energy" or by
wire/bank transfer. All wire/bank transfers should be net of all applicable
bank and financial charges.
13.5. Opening and Evaluation of RE Applications. — The DOE shall open the
applications at exactly 1300H, on the last day of the submission of RE
Applications.
13.6. Evaluation, Selection and Award. — The evaluation and selection of RE
Applications and award of RE Contract shall be conducted following the criteria
and procedures set hereunder:
13.6.1. Applications with incomplete documents based on the Checklist of
Requirements shall be automatically disqualified during the opening of RE
Applications. No additional documents shall be accepted after the
deadline for submission of RE Applications.
13.6.2. RE Applicants shall be duly informed by the REMB Supervising
Assistant Secretary whether their application passed the completeness
check and shall be subjected to further legal, technical and financial
evaluations. Applicants who were disqualified for submitting incomplete
documents shall likewise be informed by the REMB Supervising Assistant
Secretary of the fact of their disqualification and the reasons therefor.
13.6.3. RE Applications which passed the completeness check shall be
evaluated based on the following criteria:
Technical 20%
Qualification
Financial 40%
Qualification
13.7. An OCSP, with respect to any or all PDAs included therein, shall be declared
a failure when any of the following circumstances exists:
13.7.1. No RE Application was received by the DOE;
13.7.2. No RE Application passed the legal requirements; or
13.7.3. When one or more RE Applications passed the legal requirements
but after the evaluation of technical and financial proposals, none of such
RE Applications were able to meet either the technical or financial
requirements.
In any of the foregoing cases, the PDA shall be opened for Direct Applications.
To initiate the change of mode of awarding RE Contract from OCSP to Direct
Application for the relevant areas, the DOE shall include in the announcement
of the result of the OCSP the area/s which shall be open for Direct Application,
indicating thereat when the new application process shall commence.
CHAPTER V
Procedure for RE Contracts under Direct Application
SECTION 14. Coverage. — Direct Application shall be observed in processing RE
Applications for: (a) RE Resources located in PDAs which the DOE shall declare as available
under this mode pursuant to Section 13.7 hereof, and (b) RE Resources in areas other than
those included in the PDAs, subject to the procedures provided herein.
PART 1
Pre-Application Process
SECTION 15. Submission of Letter of Intent. — All interested participants shall
prepare an LOI to develop a certain area, in accordance with the mapping requirements
(Annex J), addressed to the REMB Director, which shall be submitted through the DOE-
Records Management Division (RMD). The submission of the LOI shall not be considered as
a filing of an RE Application and shall not commence the application process.
Upon receipt of the LOI, the RMD shall attach a radio-frequency identification (RFID)
tag thereon, encode the document under Energy Application Monitoring System (EAMS)
and toward the document to the REMB Assistant Director.
SECTION 16. Orientation of Interested Participants. — The orientation is intended
to inform the interested participants about the RE Application requirements, and to guide
them through the process of evaluating and awarding of the RE Contracts and the
registration of an RE Project.
16.1. Within three (3) working days from receipt of the LOI, the concerned REMB
Division, through its Assistant Director, shall issue an acknowledgment letter
addressed to the interested participant and encode the document in EAMS.
16.2. All interested participants shall be informed of the schedule of orientation or
briefing on the RE Application requirements and processes.
16.3. Should any interested participant consider the orientation or briefing as
unnecessary or dispensable, they may waive such option in writing either in its
LOI or in response to the notice of the schedule of orientation provided in the
preceding paragraph.
SECTION 17. Area Verification. — The area verification process shall determine
whether any of the conditions under Section 23 of this Circular apply to the area identified
by the interested participant.
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17.1. The concerned technical division of the REMB, through its Assistant
Director, shall endorse the LOI and its attachments to the ITMS within two (2)
working days from its receipt of the same. For solar and biomass development,
the concerned REMB Division shall also endorse to the DOE-Legal Services (LS)
the sworn affidavit of undertaking. Said affidavit is an undertaking executed by
the interested participant to submit a proof of ownership or possessory rights
over real property covered by the proposed project area/site located in private
lands; or proof of application to acquire possessory rights over areas considered
as public lands. Such proof of land rights shall be submitted as part of the
application requirements found in Annex I.
17.2. Within five (5) working days from receipt of the LOI, the ITMS and LS shall
complete the area verification, encode in the EAMS the memorandum on the
result of the area verification, and provide the concerned REMB Division with
the verification report.
17.3. Within two (2) working days from its receipt of the results of the area
verification, the concerned REMB Division shall notify the interested participant
in writing that it may proceed with the filing of RE Application. The letter to the
interested participant shall be encoded under the EAMS.
17.4. If the proposed area is found to be partially occupied by another RE
Developer developing the same type of RE Resource being applied for, the
interested participant has the option to proceed with filing an RE Application
over the re-validated area (net of the area occupied by another RE Developer).
PART 2
Filing and Evaluation of RE Applications
SECTION 18. Receipt of RE Applications. — Following the area verification step,
the interested participant may proceed to submit its RE Application by complying with the
procedures and requirements as follows: EcTCAD
18.1. Prior to its submission of the RE Application to the RMD, the RE Applicant
shall proceed to the concerned REMB Division who shall determine whether the
RE Application is complete based on the Checklist of Requirements. The
determination shall be made in the presence of the RE Applicant or its duly
authorized representative. No RE Application shall be received and no order of
payment shall be issued unless the RE Applicant has submitted all the
documentary requirements enumerated under the Checklist of Requirements.
18.2. After payment of the application and processing fees, the RE Application
shall be submitted to the RMD, together with a photocopy of the official receipt
of the said fees. Thereafter, the RMD shall attach a RFID tag thereon, encode
the document under EAMS and forward the document to the REMB Assistant
Director. The RE Application shall follow the format prescribed in Section 13.4.2
hereof. Each printed copy shall be enclosed in separate folders designated for
the legal, technical, and financial documents. At this point, the RE Application is
deemed filed and any amendment thereof by the RE Applicant shall no longer
be allowed.
SECTION 19. Evaluation of RE Applications. —
19.1. The RMD shall, within one (1) working day from receipt of RE Application,
forward the same to the concerned REMB Division. The concerned REMB
Division shall record the date of filing of the RE Application and within the same
day of receipt from the RMD, distribute one (1) copy of the RE Application each
to the LS for legal evaluation, and the DOE-Financial Services (FS) for financial
evaluation.
19.2. The concerned divisions of the REMB, LS, and FS shall evaluate the RE
Application simultaneously. The evaluations shall be completed within five (5)
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working days from the date of their receipt of the same.
19.2.1. If the RE Application passes the legal, technical, and financial
evaluations, the evaluation documents shall be collated and endorsed by
the REMB Director to its Supervising Assistant Secretary and
Undersecretary. To this end, the concerned REMB Division shall assist the
REMB Assistant Director by preparing, within three (3) working days from
its receipt of the evaluation documents, a memorandum endorsing the RE
Application for the concurrence of the LS, the draft RE Contract, and the
corresponding Certificate of Registration (COR), as necessary. The
endorsement must include the original copy of the results of legal,
technical and financial evaluations along with all their attachments, and
the project area map and its technical descriptions.
19.2.2. In case the RE Application does not pass any of the legal, technical,
or financial evaluations, the concerned REMB Division shall, within three
(3) working days from receipt of all the evaluations, prepare a letter to be
signed by REMB Director requiring the RE Applicant to submit documents
in support of its application within a period of ten (10) working days from
receipt of such notice.
(a) Failure of the RE Applicant to submit supplementary
documents within the prescribed period shall be deemed an
abandonment of the RE Application. Thereafter, a notice to the
RE Applicant shall be prepared by the REMB, signed by its
Assistant Secretary, stating that the RE Application is deemed to
have been abandoned by the RE Applicant.
(b) In case the RE Applicant submits supplementary documents
within the prescribed period above, the REMB shall immediately
forward such documents to the concerned units of the DOE
upon its receipt of the same. Thereafter, the concerned units of
the DOE shall re-evaluate the RE Application and submit the
result within two (2) working days from receipt thereof. The
REMB Assistant Director shall collate the results and follow the
procedure outlined in Section 19.2.1 above if the RE Application
passed the legal, technical, and financial requirements.
(c) Should the RE Application still fail to pass any of the
subsequent legal, technical or financial evaluations, the REMB
Assistant Director shall recommend the disqualification of the
RE Application to the supervising Assistant Secretary who shall
then issue a formal notice to the RE Applicant stating the basis
of the disqualification. Upon receipt of the RE Applicant of the
letter of disqualification, the REMB shall prepare a
memorandum to the ITMS to immediately re-open the area for
RE Applications by posting such information on the DOE
website.
19.3. It shall be the duty of the concerned DOE unit to encode all documents and
activities in the EAMS during the evaluation process.
CHAPTER VI
Award of RE Contracts
SECTION 20. Approval and Signing of the RE Contract. — The following procedure
shall govern the awarding of RE Contracts and the registration of RE Developers: HSAcaE
20.1. Notification of Award. — The DOE shall notify the selected (under the OCSP)
or qualified (under Direct Application) RE Applicant of the award and the
schedule of the signing of the RE Contract, Provided, That any RE Contract in
the nature of a financial or technical assistance agreement shall be approved
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and executed by the President of the Philippines, upon the recommendation by
the DOE Secretary, in accordance with Article XII, Section 2 of the Philippine
Constitution.
20.2. Signing of the RE Contract. — The signing of the RE Contract shall be
divided into two stages, namely: a) pre-signing by the RE Applicant; and b)
signing of the DOE Secretary.
20.2.1. The REMB Supervising Assistant Secretary shall review the
recommendation and endorse the same to the REMB Supervising
Undersecretary within two (2) working days from receipt thereof. The
Undersecretary shall act on the endorsement within two (2) working days
from receipt of the documents. Within one (1) working day from the
concurrence of the Undersecretary of the REMB's recommendation, the
REMB Director shall require the RE Applicant to pre-sign the original
copies of the RE Contract following the prescribed template.
20.2.2. Within one (1) working day from the date of pre-signing, the REMB
Director shall prepare a memorandum to the DOE Secretary, coursed
through its Supervising Assistant Secretary and Undersecretary,
endorsing the award of the RE Contract. The endorsement shall include
the pre-signed RE Contract with the corresponding Certificate of
Registration (COR), and all the relevant attachments.
20.2.3. The REMB Director shall forward the pre-signed RE Contract, along
with the endorsement and all its attachments, to the LS for its
concurrence. Within three (3) working days from receipt of the
documents, the LS shall review the pre-signed RE Contract and all the
other documents and revert the same to REMB for further processing.
20.2.4. Upon receipt of the LS concurrence of the pre-signed RE Contract
and its accompanying documents, the REMB shall endorse the same to its
Supervising Assistant Secretary.
20.2.5. The REMB Supervising Assistant Secretary shall review the pre-
signed RE Contract and its accompanying documents and endorse the
same to the REMB Supervising Undersecretary. Likewise, the REMB
Supervising Undersecretary shall review the pre-signed RE Contract and
its accompanying documents and endorse the same to the DOE
Secretary. This process shall take three (3) working days to complete.
20.2.6. The Office of the DOE Secretary shall receive the pre-signed RE
Contract and all its attachments, the endorsement of the REMB, and the
concurrence of the LS thereto. The DOE Secretary shall act on the
documents within seven (7) working days from receipt thereof.
20.3. Payment of Signing Fee. — The REMB Director shall send a written notice to
the RE Applicant within one (1) working day from the DOE Secretary's signing
of the RE Contract to pay the signing fee and post the performance bond, within
the relevant period, covering the first Contract Year. Said notice shall likewise
contain an order of payment for the signing fee which shall be paid directly to
the Treasury.
The RE Developer shall submit proof of payment of the signing fee within
fifteen (15) calendar days from receipt of notice. Failure of the RE Developer to
do so shall be deemed as an abandonment of the RE Application and shall
cause the revocation of the COR and the RE Contract. Further, non-posting of
the performance bond within thirty (30) calendar days from receipt of notice
shall cause the RE Contract to be deemed void.
20.4. Delivery of the Signed RE Contract. — The notarized copy of the RE Contract
and the COR shall be furnished to the RE Applicant upon submission by the
latter of a copy of the official receipt of payment of the corresponding signing
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fee to the DOE. A copy of the original RE Contract and a photocopy of the COR
shall be provided to the concerned REMB Division and the RMD.
20.5. Duty to Maintain Records . — The concerned REMB Division shall maintain a
record of all LOIs received in the EAMS, and pending RE Applications and signed
RE Contracts in the Energy Virtual One-Stop Shop (EVOSS) System.
20.6. The ITMS shall make the area available to other applicants only when: a) the
RE Applicant failed to qualify; or b) withdraws or abandons its LOI or RE
Application, as the case may be, and only after due notice is given to the
concerned interested participant/RE Applicant of such information by the REMB
Supervising Assistant Secretary, copy furnishing the ITMS with the said notice.
Once an area is declared to be available, subsequent RE Applications covering
the same may be allowed, and only on a first-come, first-served basis.HESIcT
CHAPTER VII
Technical Guidelines
SECTION 21. Configuration of RE Contract Area. — The configuration of the
proposed Contract Area shall depend on the type of resource being applied for which shall
be as follows:
21.1. For solar and biomass resources, the area shall be in one (1) parcel polygon.
The interested participant shall specify the type of system of the RE Project,
whether it is ground-mounted, roof-mounted or floating solar and submit the
technical requirements based on the chosen system.
21.2. For hydropower resources, the applied area shall indicate the geographic
coordinates of the proposed location of weir, with elevation, and the
powerhouse.
21.3. For wind, geothermal and ocean resources, the applied area shall either be
polygonal or in blocks following the Blocking System or a combination of both.
SECTION 22. Proof of Access to Proposed/Applied Area. — The RE Applicant for
solar and biomass development shall submit proof of ownership or possessory rights over
real property/ies covered by the proposed project area/site located in private lands:
Provided, That in the case of public lands, proof of application to acquire possessory rights
ever the real property/ies covered by the proposed area shall suffice.
SECTION 23. Area Verification Results . — The ITMS shall provide the concerned
REMB Division with the verification report which may indicate that the proposed Contract
Area is:
23.1. Covered by an existing PDA under the OCSP, RE Contract or pending RE
Application for the development of the same RE Resource in the LOI or RE
Application, or other energy resource assessment activities as submitted by the
concerned DOE unit and verified by the ITMS;
23.2. Within or overlaps the area of an existing energy service or operating
contract such as Petroleum SC, COC, SSMP or RESC, other than the RE resource
or technology being applied for;
23.3. Within or overlaps the area of an existing energy service or operating
contract application such as Petroleum SC, COC, SSMP or RESC, other than the
RE resource or technology being applied for;
23.4. Within the protected areas under RA No. 11038 or the Expanded National
Integrated Protected Areas System Act of 2018, ancestral domains with
Certificate of Ancestral Domain Title or Claim, areas with Tenurial Instruments
from other government agencies, and other areas covered by significant
geospatial data that will be identified as necessary in the evaluation of the RE
application based on available data on file at the ITMS and the National
Mapping Resource Information Authority's Philippine Geoportal Project website;
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23.5. Covered by the LOI of the same or other energy resource; or
23.6. Open for RE Applications.
SECTION 24. Multiple Resources in an Area. — In instances of area overlap found
under Sections 23.2 to 23.3 above, the interested participant may still pursue the RE
Application subject to the provisions herein below set forth.
24.1. Acknowledgment of Prior Right of Applicants, Registered Developers, and/or
Energy Contractors. — The interested participant may still apply for an RE
Contract over an area with multiple resources by first submitting a notarized
acknowledgment and undertaking that it recognizes and shall continue to
recognize the existence of the prior rights of the existing applicants and/or
developers thereon.
24.2. Notice to Applicants, Registered Developers, and/or Energy Contractors
Holding Prior Rights. — In giving notice to interested participants, applicants,
registered developers, and/or energy contractors holding prior rights to a
certain area, the following process shall be observed:
24.2.1. The REMB shall inform both the interested participant, and applicant
or contractor/developer of the overlap where the latter shall be given five
(5) working days from receipt of notice to file any objections, stating
therein justifiable reasons therefor.
24.2.2. If no objection is filed by the applicant, energy contractor/developer
within the prescribed period, the interested participant shall be given
three (3) working days from receipt of such notice to file an RE
Application.
24.2.3. If an objection is filed, the DOE Secretary, upon recommendation of
concerned DOE bureaus, shall resolve the matter within ten (10) working
days from receipt thereof, taking into account the most beneficial use of
the resources.
CHAPTER VIII
Administration of RE Contracts
SECTION 25. Posting of a Performance Bond. — The RE Developer shall post a
bond or any other guarantee of sufficient amount, but not less than the minimum
expenditures commitment for the first Contract Year, which shall be a condition precedent
for the effectivity of the RE Contract. A valid and subsisting performance bond is required
to be maintained annually until the pre-construction phase of the RE Project. caITAC
SECTION 26. Updating of RE Projects Data to the EVOSS and DOE Website. — The
following shall govern the posting and updating of RE Contracts awarded and pending RE
Applications on the DOE website.
26.1. The REMB-Technical Service Management Division (TSMD), in coordination
with the relevant REMB Divisions, shall collate and update the list of RE
Contracts awarded and RE Applications filed and under evaluation on a
quarterly basis. Upon full operation of the EVOSS, updating of data shall be in
accordance with the periods provided in the system.
26.2 All concerned DOE units shall provide updates to the EVOSS and DOE
websites.
26.3. All RE Developers shall be required to register with the EVOSS for regular
updating of their respective RE Projects.
SECTION 27. Amendment of RE Contracts. —
27.1 Amendment to RE Contracts, When Required. — RE Contracts shall be
amended only: (a) when making changes to the RE Contract Area; or (b) under
the circumstances enumerated in Section 27.4 hereof.
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No amendment to the RE Contract is required when the RE Project transitions
from the Pre-Development to the Development Stage. However, the
relinquishment of a portion of the Contract Area after identifying the Production
Area pursuant to Section 5 above shall result in the issuance of new annex to
the RE Contract, indicating the revised Contract Area, with corresponding map
and technical description.
27.2. Amendments to the RE Contract Area. — The RE Developer shall submit a
request in writing addressed to the REMB Director, with the letter attention
given to the concerned REMB Division, and shall comply with the following:
27.2.1. Technical description of proposed amendment to the Contract Area
indicates the technical specifications and other mapping requirement for
the purpose of area verification;
27.2.2. The proposed amendment shall cover an area contiguous to the
existing Contract Area and, upon verification by the ITMS pursuant to the
process in Section 23, is available and open for RE Resource exploration,
development and/or utilization;
27.2.3. The amendment of the Contract Area is justified and reasonable,
which may be proven by: (a) the results of the resource assessment, duly
verified by the concerned REMB unit; (b) proof of land rights; (c) proof
that the RE Developer is not in default of its technical and financial
obligations under the RE Contract; and (d) other relevant facts and/or
documents; and
27.2.4. The Work Program with respect to the amended Contract Area is
acceptable.
Holders of RE Contracts with provisions on milestone periods shall be allowed to
apply for Contract Area amendments during the milestone period, Provided,
That all approved milestone activities under the RE Contract have already been
accomplished.
27.3. All other RE Contracts entered into by the DOE which used the templates for
RE Contracts prior to this Circular, shall be allowed to apply for Contract Area
amendments at any time prior to sixty (60) calendar days before the expiration
of the Pre-Development Stage.
27.3.1. In case the DOC states that the viability of the project is subject to a
Contract Area amendment, such amendment may be allowed upon
issuance of the COCOC.
27.3.2. The following templates for amendments of Contract Area under
existing RE Contracts are hereby adopted as follows:
(a) RE Contracts issued in compliance with this Circular, shall
adopt the template for the amendment of Contract Area
attached hereto as Annex K; and
(b) All other RE Contracts issued prior to or in accordance with
Department Order (DO) No. DO2013-08-0011, entitled
"Adopting Policies in Relation to the Processing of Renewable
Energy Service Contracts and Mandating the Adoption of the
Revised Templates for Renewable Energy Service Contracts"
shall adopt the revised RE Contract templates attached hereto
as Annexes A to F.
27.4. Other Amendments. — RE Contracts shall also be amended in any of the
following instances:
27.4.1. Increase or decrease in the installed capacity of the RE Project;
27.4.2. Change of type of feedstock for biomass operations;
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27.4.3. Change of location of project site (for biomass and hydro sources
only). ICHDca
27.5. Only a revised COR shall be issued in case of the following changes:
27.5.1. Company name of the RE Developer; and/or
27.5.2. Assignment of RE Contract in accordance with the terms thereof, to
an entity that has the same legal, technical and financial qualifications as
the assignor/RE Developer.
The amendments under this Section shall require the surrender of the original
COR prior to ealuation of the request, Provided, That in the case of an
amendment solely for the change of the company name, the request shall be
directly endorsed to the DOE Secretary after legal evaluation.
27.6. Evaluation of Requests for RE Contract Amendment. — All requests for RE
Contract amendment shall be submitted to the REMB, through RMD, and shall
be processed as follows:
27.6.1. Upon receipt of the request, the RMD shall attach a RFID tag
thereon, encode the request under the EAMS and forward the same to the
REMB Director.
27.6.2. Within one (1) working day from receipt of the request for RE
Contract amendment, the REMB Director shall forward the documents to
the concerned REMB Division for evaluation.
27.6.3. The concerned REMB Division shall evaluate the request within five
(5) working days. In case the evaluation of the concerned REMB Division
shows: a) that there are additional costs to be incurred that should
warrant another financial evaluation; b) if there are any legal concerns on
the RE project; or c) if there is a need of re-plotting of Contract Area, it
shall endorse the request to FS, LS and/or ITMS which shall evaluate the
request within five (5) working days from receipt of such endorsement.
27.6.4. Within two (2) working days from completion of the evaluation, the
concerned REMB Division, through the REMB Director, shall provide the
REMB Supervising Assistant Secretary and Undersecretary its
recommendation on the request and the complete basis thereof.
27.6.5. The REMB Supervising Assistant Secretary and Undersecretary
shall, within three (3) working days from receipt of such recommendation,
issue a memorandum that shall contain the highlights of the evaluation
and a recommendation to the DOE Secretary for approval.
27.7. Revision of the Work Program. — Subject to terms and conditions stipulated
in the RE Contract, the RE Developer may request for revision of its Work
Program with justification on such revision and shall be processed in
accordance with the following:
27.7.1. Upon receipt of the request, the RMD shall attach a RFID tag
thereon, encode the request under the EAMS and forward the same to the
REMB Director.
27.7.2. Within one (1) working day from receipt of the request for the
revision of Work Program, the REMB Director shall forward the documents
to the concerned REMB Division for evaluation.
27.7.3. The concerned REMB Division shall evaluate the request within five
(5) working days. In case the evaluation of the concerned REMB Division
shows: a) that there are additional costs to be incurred that should
require another financial evaluation, or b) if there are new legal issues
brought about by such revision, it shall endorse the request to the FS
and/or LS which shall evaluate the request within five (5) working days
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from receipt of such endorsement.
27.7.4. Within two (2) working days from completion of the evaluation, the
concerned REMB Division, through the REMB Director, shall provide the
REMB Supervising Assistant Secretary its recommendation on the request
and the complete basis thereof.
27.7.5. The REMB Supervising Assistant Secretary shall, within three (3)
working days from receipt of a memorandum containing the highlights of
the evaluation and a recommendation, endorse the same to the REMB
Supervising Undersecretary for approval.
27.8. The concerned REMB Division shall immediately provide to the TSMD, ITMS,
and DOE-Investment Promotion Office (IPO) the status of RE Contract/COR for
timely update of database.
SECTION 28. Assignment of RE Contracts. —
28.1. All assignments of RE Contracts shall be subject to prior written approval of
the Department.
28.2. The RE Developer may assign part or all of its rights and/or obligations
under the RE Contract to its Affiliate or any third party, subject to Section 28.1,
and in accordance with the following:
28.2.1. The RE Developer shall submit to the Department copies of the
written document which unequivocally shows the agreement of the
parties thereat to the assignment of the RE Contract; and
28.2.2. In the case of a partial assignment, the RE Developer shall
guarantee in writing to the Department the performance of the assigned
obligations. TCAScE
30.2.2. Within one (1) working day from receipt of the application
documents, the RMD shall transmit the application to the REMB Director.
Any incomplete documentary requirements in the application for RE
Contract conversion may be rectified by the applicant within five (5)
working days from receipt of such notice. Upon receipt of supplemental
documents or clarification, the application shall be processed following
the procedures in Section 30.2.
30.2.3. The concerned REMB Division shall evaluate the application based
on performance of the contractor/RE Developer of its contractual
obligations under the old contract/agreement and its application
documents within ten (10) working days from receipt thereof.
30.2.4. The REMB shall then endorse the mapping requirements to the ITMS
who shall produce/print the map of the Production Area within five (5)
working days from receipt of the endorsement.
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30.2.5. Qualified applications shall be endorsed by the REMB to its
Supervising Undersecretary, through its Supervising Assistant Secretary,
for concurrence. The REMB Supervising Undersecretary shall act on the
applications so endorsed within three (3) working days from receipt
thereof.
30.2.6. Upon the concurrence of the Undersecretary, the REMB shall notify
the RE Developer of such fact and require the pre-signing of the RE
Contract.
30.2.7. Within one (1) working day from the RE Contract pre-signing, the
REMB shall endorse the pre-signed RE Contract along with the evaluation
results to the DOE Secretary for approval, through the REMB Supervising
Undersecretary and Assistant Secretary. The DOE Secretary shall act on
the documents within five (5) working days from receipt thereof.
30.2.8. Upon signing of the RE Contract by the DOE Secretary, the REMB
shall notify the RE Developer to pick up its copy of the RE Contract.
SECTION 31. Termination of RE Contracts . — The DOE shall have the power to
terminate RE Contracts, after due notice to the RE Developer.
31.1. Evaluation Process for RE Contract Termination . — The concerned REMB
Division shall recommend the termination of the RE Contract within the
following timelines:
31.1.1. Five (5) working days from the lapse of the Pre-Development Stage
of the RE Contract where the RE Developer failed to submit its DOC;
31.1.2. Three (3) working days from the voluntary relinquishment of the RE
Developer of the RE Contract;
31.1.3. Prior to the pre-construction phase of the RE Contract, upon the
discovery that the RE Developer failed to maintain the required
performance bond; or
31.1.4. At any stage of the RE Contract, upon findings of any of the grounds
for RE Contract termination as stipulated therein.
The failure of the DOE to adhere to the periods provided above shall not be
construed as a waiver of its power to evaluate and recommend the termination
of RE Contracts at a later time.
31.2. With respect to Sections 31.1.1 and 31.1.4 above, the concerned REMB
Division shall prepare a letter, signed by the REMB Director, requiring the RE
Developer to explain in writing why its RE Contract should not be terminated.
The RE Developer shall be given a non-extendible period of thirty (30) calendar
days to submit its explanation, which shall be accompanied by supporting
documents.
No later than twenty working (20) days from its receipt of the RE Developer's
written explanation, the concerned REMB Division shall submit its findings and
recommendation to the REMB Director.
31.3. Within three (3) working days from receipt of the findings and/or
recommendation, the REMB Director shall act upon the same and recommend a
course of action to the DOE Secretary through its Supervising Assistant
Secretary and Undersecretary.
31.4. In case the DOE Secretary/approves the REMB Director's recommendation,
the RE Developer shall be notified in writing of the termination of its RE
Contract. The concerned REMB Division shall inform the TSMD, ITMS, and IPO of
such fact.
31.5. Subject to the conditions under Section 31 hereof, areas covered by
terminated RE Contracts shall be declared by the DOE open for development,
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specifying the mode of awarding of the RE Contract; which, if the area is
determined as a PDA, RE Contract applications shall be through OCSP as
provided herein. Otherwise, the area shall be available to all interested parties
for RE resource development under Direct Application, and only on a first-come
first-served basis.cSaATC
Issued on October 1, 2019, at Energy Center, Rizal Drive, Bonifacio Global City,
Taguig City.
x) "Work Program" refers to all types of plans and programs and related activities
formulated for the performance of the work obligations by the RE DEVELOPER, along
with the corresponding budgetary estimate, submitted to the DEPARTMENT under
this RE Contract, attached hereto as Annex "B" and shall thereafter be updated on a
regular basis.
SECTION III. TERM. —
3.1 From the Effective Date, the term of this RE Contract shall be twenty-five (25)
years.
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3.2 At the option of the RE DEVELOPER, the term of this RE Contract may be extended
for another twenty-five (25) years, subject to the approval of the DEPARTMENT. The RE
DEVELOPER shall request the DEPARTMENT, in writing and not later than one (1) year prior to
the expiration of the initial term, for an extension of the term. The extension of the term of this
RE Contract shall be governed by such terms and conditions to be mutually agreed upon by the
Parties.
SECTION IV. WORK PROGRAM. —
4.1 The RE DEVELOPER shall carry out the Work Program, details of which are
particularly described in Annex "B".
4.2 During the implementation of the Work Program, the RE DEVELOPER shall submit
for evaluation and approval by the DEPARTMENT any revisions thereto at least one (1) month
prior to the end of each Contract Year; Provided, however, That revision shall not be allowed
within the first two (2) Contract Years; Provided, further, That the RE DEVELOPER shall be
allowed to subsequently revise its Work Program only if it has substantially complied with all its
material financial and technical activities under the Work Program for the immediate preceding
Contract Year and such revision shall be allowed only once per Contract Year.
4.3 Not later than two (2) months prior to the end of the first five (5) years of the RE
Contract, the RE DEVELOPER shall submit a Work Program for the next five (5) years and shall
do so every next five (5) years thereafter. The Work Program or any revisions thereof shall
require the approval of the DEPARTMENT.
4.4 In the event of failure of the RE DEVELOPER to comply with its commitments under
the Work Program, the DEPARTMENT shall call the performance bond posted by the RE
DEVELOPER. This is without prejudice to the right of the DEPARTMENT to terminate the RE
Contract.
SECTION V. RIGHTS AND OBLIGATIONS. —
5.1 RE DEVELOPER shall have the following rights:
a. To be granted fiscal and non-fiscal incentives and privileges under the Act, the IRR
and all other existing laws that are not otherwise modified or repealed by the Act;
b. To receive assistance from the DEPARTMENT in endorsing the Projects to the other
agencies of the National Government, LGUs, Board of Investments (BOI) and other
entities, for the acquisition of permits, licenses and clearances and availment of
applicable fiscal and non-fiscal incentives;
c. Have at all times the right of ingress to and egress from the Project Site to and from
facilities wherever located;
d. Acquire rights-of-way and similar rights on, over, under, across and through the
Project Site or properties adjacent to the Project Site, which constitute or is
reasonably expected to constitute the Project Site as the RE DEVELOPER may
reasonably deem necessary.
The DEPARTMENT shall, upon request by the RE DEVELOPER as may be reasonable
given the attendant circumstances, assist the RE DEVELOPER in securing such
rights. For such purpose, the DEPARTMENT shall and does hereby appoint the RE
DEVELOPER as its attorney-in-fact and does hereby give and grant to the RE
DEVELOPER full authority to act for and on its behalf in the negotiation and
conclusion of agreements and payments for such rights. All obligations, payments
and expenses arising from or incidental to the acquisition of such rights shall be for
the account of the RE DEVELOPER so as to enable the RE DEVELOPER to have
ingress into and egress from the Project Site and to perform all Biomass Energy
Operations in accordance with this RE Contract and in consideration of which,
entitlement to such rights shall be held in trust in favor of the RE DEVELOPER.
e. Engage the services of Expatriate Experts who shall exercise their technical
professions solely for the Biomass Energy Systems: Provided That, Filipino
Employees shall be given preference to positions for which they have adequate
training and experience required by the RE DEVELOPER; and Provided, further, That
if the employment or connection of such Expatriate Experts with the RE DEVELOPER
ceases, applicable laws and regulations shall apply to them and their immediate
family;
5.2 The RE DEVELOPER shall have the following obligations:
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a) Within the period of the first five (5)-year Work Program, the RE DEVELOPER shall
develop, construct, install, commission and operate the Biomass Energy System in
the Project Site;
b) Secure necessary permits, licenses, endorsements, agreements and clearances from
all relevant government and private entities for the Project;
c) Comply with all its work and financial commitments in carrying out its obligations
under this RE Contract and provide all necessary services, technology and financing
in connection therewith;
d) Pay the taxes due to the GOVERNMENT, as may be applicable;
e) Maintain complete and accurate accounting, financial and technical records of its
Biomass Energy Systems, subject to Sections VII (Data and Reports Submission) and
VIII (Confidentiality);
DcHSEa
f) Submit technical and financial reports in accordance with the format prescribed by
the DEPARTMENT within the period prescribed as described in Section VII (Data and
Reports Submission);
g) Allow officials and representatives authorized by the DEPARTMENT access to the
Project Site, and to the accounts, books and records directly relating to the Biomass
Energy Operations during reasonable hours and without causing disruption to the RE
DEVELOPER's operation. The RE DEVELOPER shall provide such reasonable facilities
and assistance as may be practicable to ensure the success of the inspection;
h) Give priority in employment to qualified personnel in the Host LGUs and give
preference to Filipinos in all types of employment for which they are qualified;
i) At the start of every Contract Year, post a performance bond or any other guarantee
of sufficient amount but not less than the annual budgetary estimate for the
corresponding Contract Year in favor of the DEPARTMENT from a list of
DEPARTMENT-accredited insurance or surety companies. The posting of performance
bond shall be conditioned upon the faithful performance by the RE DEVELOPER of
any or all of the commitments and obligations under the Work Program until the
commencement of the construction of the Generation Facility.
Upon the commencement of the construction of the Generation Facility, the RE
DEVELOPER shall notify the DEPARTMENT of such fact and the latter shall verify the
same. Thereafter, the obligation to post the bond shall cease;
j) Be subject to the provisions of laws of general application;
k) Be responsible for procurement of installation, equipment and supplies, and for
entering into subcontracts related to the Biomass Energy Operations;
l) Comply with the provisions of Department Circular No. DC2012-11-0009 entitled
"Renewable Energy Safety, Health and Environment Rules and Regulations", as may
be amended, and in so doing, (1) exert its best efforts to prevent pollution and
damage to the atmosphere, oceans, rivers, lakes, harbors and land; and (2) ensure
the safety and health of its operating personnel;
m) Give preference to Philippine companies/agencies entering into subcontracts on
goods or services that are required in the Biomass Energy Operations but are not
carried out by the RE DEVELOPER: Provided, That the goods and services are
competitive as to cost, quality and availability, and the services are available in the
Philippines;
n) Be responsible in the proper handling of data, samples, information, reports, and
other documents;
o) Maintain all meters and measuring equipment in good order and allow access to
these to inspectors authorized by the DEPARTMENT;
p) Organize the Information, Education and Communication (IEC) Campaign on
benefits to the Host LGUs pursuant to Section 18 of the DEPARTMENT's Department
Circular No. DC2009-07-0011; and
q) Comply with all rules, regulations and guidelines issued by the DEPARTMENT and
other government agencies that are applicable hereto.
5.3 Upon the Effective Date of this RE Contract or upon the approval of the RE
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DEVELOPER's New Investment, the DEPARTMENT shall issue a Certificate of Registration to the
RE DEVELOPER, to enable it to avail of the fiscal and non-fiscal incentives and privileges as
stated under the Act and its IRR. The registration shall be valid and effective for the entire term
and effectivity of this RE Contract.
SECTION VI. REPRESENTATION AND WARRANTIES. —
Acknowledging that the GOVERNMENT, through the DEPARTMENT, has entered into this RE
Contract in reliance upon the representations and warranties in this Section, the RE DEVELOPER
represents and warrants as follows:
6.1 It is a corporation or entity duly formed, established, validly existing and in good
standing under the laws of the Philippines with full power to own its property; to carry on its
business as it is now being conducted; and to execute, deliver and perform its obligations under
this RE Contract, and the entering into and performance of this RE Contract by the RE
DEVELOPER does not conflict with the articles of incorporation, by-laws, and other constitutive
documents of the RE DEVELOPER and has been duly authorized by all necessary corporate and
legal action on the part of the RE DEVELOPER;
6.2 The individual signing this RE Contract on behalf of the RE DEVELOPER is duly
authorized to sign as of the Effective Date;
6.3 There is no litigation, arbitration or administrative proceeding is pending or, to the
best knowledge of the RE DEVELOPER, threatened against the RE DEVELOPER or its properties
the adverse determination of which would adversely affect the ability of the RE DEVELOPER to
perform or comply with any of its obligations under this RE Contract;
6.4 The RE DEVELOPER:
a) Has not been declared in default in respect of any of its financial commitments or
obligations based on their reports duly validated by the DEPARTMENT;
b) Is not otherwise in default of any kind in respect of any financial commitment or
obligation or in respect of any agreement, undertaking or instrument as a party
thereof by which it, or any of its assets or properties, may be bound; and
c) Is not aware of a fact that by the service of notice and/or lapse of time would
constitute a default in any or both of sub-paragraphs (a) and (b) above.
6.5 No written material information given by the RE DEVELOPER to the DEPARTMENT
under this RE Contract contains any misstatement of fact as of the Effective Date or omits to
state a fact that is materially adverse to the interests of the DEPARTMENT; and SCaITA
6.6 The ownership of the RE DEVELOPER's capital stock complies with applicable laws
and regulations.
SECTION VII. DATA AND REPORTS. —
7.1 All data and reports, except for proprietary techniques used in developing such
technical data and reports, must be submitted by the RE DEVELOPER to the DEPARTMENT in
accordance with the format approved by the DEPARTMENT.
7.2 The technical data and reports to be submitted by the RE DEVELOPER shall include,
but not be limited to, the following:
a) Annual Progress Report — shall be submitted not later than two (2) months after the
end of each Contract Year and shall contain the summary of accomplishments under
the approved Work Program, direct or indirect jobs generated, summary of fiscal
incentives availed in Philippine Peso and status of construction with relevant
comments and recommendation on any technical findings, among others;
b) Procurement Plan — shall be submitted not later than one (1) month from the
approval of the Work Program and shall be designed according to the approved
Work Program, containing an itemized list of equipment, materials, and supplies to
be procured with corresponding estimated costs;
c) Monthly Generation Report — shall be submitted within fifteen (15) days from the
end of each calendar month and shall include source and volume of feedstock
purchased and used, price of feedstock and total electricity generated, used and
exported to the grid;
d) General Information Sheet — shall be submitted annually within thirty (30) calendar
days from date of actual annual stockholders' or members' meeting;
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e) Audited Financial Statement — shall be submitted annually within ninety (90)
calendar days from date of actual annual stockholders' or members' meeting; and
f) Reports in accordance with the Department Circular No. DC2012-11-0009 entitled
"Renewable Energy Safety, Health and Environment Rules and Regulations" as may
be amended.
SECTION VIII. CONFIDENTIALITY. —
8.1 All documents, information, data and reports produced or generated during the
Biomass Energy Operations under this RE Contract shall be kept strictly confidential over the
term of this RE Contract or any extension thereof: Provided, That proprietary information shall be
kept strictly confidential at all times subject to lawful acquisitions of such information under
existing laws and regulations.
8.2 Without the written consent of the other Party, no Party shall use or disclose the
confidential information to any third party and/or to any Affiliate not directly connected with the
implementation of this RE Contract except the third parties and Affiliates in Section 8.5, and no
Party shall otherwise transfer, present, sell or publish it in any way within the confidentiality
periods.
8.3 The DEPARTMENT may use such confidential information belonging to the RE
DEVELOPER for the DEPARTMENT's resource mapping, data gathering, policy making and for
government planning purposes.
8.4 Upon the Expiration or Termination of this RE Contract, the DEPARTMENT may
provide third parties with the data and reports submitted by the RE DEVELOPER pursuant to this
Section.
8.5 Contrary stipulations notwithstanding, the RE DEVELOPER may furnish the
information to the following third parties, subsidiaries, and Affiliates, such as, but not limited to:
a) Banks or other credit institutions from which finance is sought by the RE
DEVELOPER;
b) Third parties, subsidiaries and Affiliates that provide services for the Biomass
Energy Operations, including Subcontractors and other service contractors;
c) Prospective assignee/s to whom rights and obligations under this RE Contract are
intended to be assigned;
d) Prospective investor/s or entities with whom the RE DEVELOPER intends to enter
into joint venture or other similar agreements for the Project;
e) Governments and stock/commodity exchanges in accordance with the laws,
regulations, or rules of the relevant country or stock/commodity exchange; and
f) Government authorities, entities and judicial courts if required by law, regulation,
directive, or order to disclose.
8.6 The information shall be revealed to those persons allowed under this RE Contract
only if and to the extent necessary and desirable for the purpose intended. Each Party shall
ensure that each such person to whom information is disclosed is informed of the confidential
nature of the information and the purpose for which it may be used and that each such person is
bound by this Section.
8.7 The RE DEVELOPER and its Affiliates or the DEPARTMENT, its officers, employees,
consultants and other duly authorized representatives shall not make any public statement or
announcement of any information produced, generated or acquired in the course of the Biomass
Energy Operations, without prior written consent of the other Party.
SECTION IX. PERFORMANCE BOND AND SIGNING FEE. —
9.1 The RE DEVELOPER shall pay the signing fee in the amount of ____________ Pesos
(PhP___________) and post the performance bond covering the first Contract Year within fifteen
(15) and thirty (30) days, respectively, from its receipt of notice.
9.2 Failure of the RE DEVELOPER to comply with Section 9.1 hereof shall render the
COR and RE Contract to be void ab initio . aTHCSE
9.3 The initial amount of the bond or other guarantee as specified in Sub-section 5.2 (i)
shall not be less than the annual financial commitment/budgetary estimate for the first Contract
Year based on the Work Program.
By: By:
___________________________ ___________________________
NAME PRINCIPAL SIGNATORY
Secretary Designation
WITNESSES
___________________________ ___________________________
NAME NAME OF WITNESS
Director IV, REMB Designation
ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES )
CITY OF TAGUIG ) S.S.
Before me, a Notary Public duly authorized in the City of Manila, this personally
________________________, appeared:
Competent
Date and Place of
Name Evidence of
Issuance
Identity
DOE SECRETARY - -
known to be the same person described in the foregoing instrument, who acknowledged before
me that his/her signature on the instrument was voluntarily affixed by him/her for the purposes
stated therein, and who declared to me that he/she executed the instrument as his/her free and
voluntary act and deed as well as the free and voluntary act and deed of the government agency
herein represented.
This RE Contract consisting of nineteen (19) pages, including the page on which the
acknowledgment is written, is signed on each and every page thereof by the Parties and his
instrumental witnesses and sealed with my notarial seal.
WITNESS MY HAND AND SEAL on ________________ at ________________.
NOTARY PUBLIC
Doc. No. _________;
Page No. _________;
Book No. _________;
Series of _________.
ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES )
CITY OF TAGUIG ) S.S.
Before me, a Notary Public duly authorized in the City of Manila, this
________________________, personally appeared:
known to be the same person described in the foregoing instrument, who acknowledged before
me that his/her signature on the instrument was voluntarily affixed by him/her for the purposes
stated therein, and who declared to me that he/she executed the instrument as his/her free and
voluntary act and deed as well as the free and voluntary act and deed of the government agency
herein represented.
This RE Contract consisting of nineteen (19) pages, including the page on which the
acknowledgment is written, is signed on each and every page thereof by the Parties and his
instrumental witnesses and sealed with my notarial seal.
WITNESS MY HAND AND SEAL on ________________ at ________________.
NOTARY PUBLIC
Doc. No. _________;
Page No. _________;
Book No. _________;
Series of _________.
ANNEX B
Accounting Procedure
Geothermal Service Contract
(GSC No. 20___-___-___-)
This GEOTHERMAL SERVICE CONTRACT ("RE Contract"), made and entered into this
DATE OF EXECUTION in Bonifacio Global City, Taguig City by and between:
The REPUBLIC OF THE PHILIPPINES, hereinafter referred to as "GOVERNMENT,"
through the "Department of Energy," hereinafter referred to as the
"DEPARTMENT," a government agency established pursuant to Republic Act No.
7638, as amended, with principal office address at the Energy Center, Rizal Drive,
Bonifacio Global City, Taguig City, Metro Manila, represented herein by its Secretary,
Name;
-and-
COMPANY NAME hereinafter referred to as the "RE DEVELOPER," a corporation
duly organized and existing under the laws of the Republic of the Philippines, with
principal office address at Company Address, represented herein by its Designation,
Name. ScHADI
y) "Government Share" refers to the amount due the national government and LGUs
from the exploration, development and utilization of the Geothermal Resources
computed in accordance with the Act and its Implementing Rules and Regulations
(IRR), and described in Section XI (Government Share) hereof;
z) "Gross Income" refers to income derived from the RE DEVELOPER's Geothermal
Operations equivalent to the gross sales of Geothermal Energy less sales returns,
discounts and allowance, and Cost of Goods Sold, which is more particularly
described in the Accounting Procedures attached as Annex "B" hereof;
aa) "Host LGU" refers to the LGU where the Geothermal Energy Resources and/or
Generation Facility is located;
bb) "Local Government Units/LGU" refers to the territorial and political subdivisions
of the State which organization and function are fully described under the Local
Government Code of 1991;
cc) "New Investment" refers to investments relating to discovery, exploration,
development and/or utilization of new RE resources or the development of new
Generation Facilities within the Contract Area distinct from the originally registered
operations having separate books of accounts;
dd) "Pre-Development Stage" refers to the preliminary assessment and feasibility
study up to the financial closing of the Project and specifically covers the term
provided in Section 3.1 of this RE Contract;
ee) "Production Area" refers to that portion of the Contract Area designated by the
RE DEVELOPER where Geothermal Resources are utilized to produce electricity in
Commercial Quantities;
ff) "Project" refers to the RE DEVELOPER's Geothermal Systems within the Contract
Area, which may be implemented in one or more phases;
gg) "Subcontractor" refers to any person or entity contracted by the RE DEVELOPER
to provide goods or services for the purpose of this RE Contract, subject to the
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provisions of existing laws;
hh) "Termination" refers to the right of the Parties to cancel this RE Contract pursuant
to Section XIV (Suspension and Termination) hereof; and
ii) "Work Program" refers to all types of plans and programs and related activities
formulated for the performance of the work obligations by the RE DEVELOPER, along
with the corresponding budgetary estimate, submitted to the DEPARTMENT under
this RE Contract as Annex "C" and shall thereafter be updated on a regular basis.
SECTION III. TERM. —
3.1 Pre-Development Stage. The Pre-Development Stage of this RE Contract shall be
for a period of seven (7) years from the Effective Date: Provided, That the RE DEVELOPER shall
submit a Declaration of Commerciality duly confirmed by the DEPARTMENT at any time during
the Pre-Development Stage otherwise, the term of this RE Contract shall automatically expire.
3.2 Development Stage. Upon submission of the Declaration of Commerciality by the
RE DEVELOPER, as confirmed by the DEPARTMENT through the issuance of a Certificate of
Confirmation of Commerciality, this RE CONTRACT shall remain in force for the balance of a
period of twenty-five (25) years from Effective Date: Provided, That at the option of the RE
DEVELOPER, by written notice to the DEPARTMENT not later than one (1) year prior to the
expiration of the initial twenty-five (25)-year period and so long as the RE DEVELOPER is not in
default of any material obligations under this RE Contract, the DEPARTMENT may approve the
extension of this RE Contract for another twenty-five (25) years, subject to the terms and
conditions to be mutually agreed upon by the Parties.
SECTION IV. CONTRACT STAGE TRANSITION. —
4.1 Declaration of Commerciality. Upon its determination that the Geothermal
Resource can generate power in Commercial Quantities, the RE DEVELOPER shall submit the
Declaration of Commerciality, along with supporting documents, within the Pre-Development
stage.
4.2 Certificate of Confirmation of Commerciality . The DEPARTMENT shall act on
RE DEVELOPER's Declaration of Commerciality within twenty (20) working days from receipt
thereof provided the submission is made within the Pre-Development Stage as provided in
Section 4.1. Within the 20-working day period, the DEPARTMENT shall either: a) issue the
Certificate of Confirmation of Commerciality or b) deny the Declaration of Commerciality.
4.3 Should the DEPARTMENT find the Declaration of Commerciality without sufficient
basis, the RE DEVELOPER shall be given a one-time chance of thirty (30) calendar days from
receipt of the result of evaluation to rectify its submission. Otherwise, the request of issuance of
Certificate of Confirmation of Commerciality shall be denied.
SECTION V. CONTRACT AREA. —
5.1 The Contract Area refers to the area as described in Annex "A" hereof, which the
RE DEVELOPER has exclusive right to explore, develop and utilize the Geothermal Resources in
accordance with this RE Contract.
5.2 The RE DEVELOPER may, upon submission of written notice to the DEPARTMENT,
surrender or waive the entire Contract Area or any portion thereof without prejudice to any other
outstanding liability or costs. In case the RE DEVELOPER completely ceases its operations, the
provisions under its Abandonment and Termination Plan shall apply consistent with its
Environmental Compliance Certificate (ECC).
5.3 During Pre-Development Stage, the RE DEVELOPER shall delineate its Production
Area which shall be the final Contract Area during the Development Stage of the Project and
shall form part of its Declaration of Commerciality.
5.4 Any areas outside the proposed Production Area shall be deemed surrendered or
waived on the date of Declaration of Commerciality. DaIAcC
g) Be informed by the DEPARTMENT, if at any time the latter becomes aware of any
intended exploration, extraction or use of energy resources other than Geothermal
Resources on the Contract Area, within thirty (30) days from the date it becomes
aware of such intended exploration, extraction or other use.
7.2 The RE DEVELOPER shall have the following obligations:
a) During the Pre-Development Stage, upon determination of Geothermal Resource of
Commercial Quantities, the RE DEVELOPER shall submit to the DEPARTMENT its
Declaration of Commerciality;
b) Secure and be subject to any necessary permits, licenses, endorsements,
agreements and clearances from all relevant government and private entities for the
Project;
c) Perform exploration, assessment, field verification, harnessing, piloting and other
activities in accordance with the Work Program and provide technology and
financing in connection with the Pre-Development Stage;
d) Perform the required Geothermal Operations and provide services, technology and
financing in connection therewith;
e) Maintain complete and accurate accounting, financial and technical records of its
Geothermal Operations, subject to Section X (Data and Reports) and XII
(Confidentiality), and in accordance with the Accounting Procedures as provided
under Annex "B" hereof;
f) Allow officials and representatives authorized by the DEPARTMENT access to the
Contract Area, and to the accounts, books and records directly relating to the
Geothermal Operations during reasonable hours and without causing disruption. The
RE DEVELOPER shall provide such reasonable facilities and assistance as may be
practicable to ensure the success of the inspection;
g) Give priority in employment to qualified personnel in the Host LGU subject to
Section XVI (Employment, Training and Development Programs);
h) At the start of every Contract Year, post a performance bond or any other guarantee
of sufficient amount but not less than the annual budgetary estimate for the
corresponding Contract Year in favor of the DEPARTMENT from a list of
DEPARTMENT-accredited insurance or surety companies. The posting of performance
bond shall be conditioned upon the faithful performance by the RE DEVELOPER of
any or all of the commitments and obligations under the Work Program until the
commencement of the construction of the Generation Facility.
Upon the commencement of the construction of the Generation Facility, the RE
DEVELOPER shall notify the DEPARTMENT of such fact and the latter shall verify the
same. Thereafter, the obligation to post the bond shall cease;
i) Be subject to the provisions of laws of general application;
j) Develop, operate and maintain the Contract Area in accordance with accepted
industry practices to enable maximum economic production of the Geothermal
Resources;
k) Be responsible for procurement of installation, equipment and supplies, and for
entering into subcontracts related to the Geothermal Operations;
l) Comply with the provisions of Department Circular No. DC2012-11-0009 entitled
"Renewable Energy Safety, Health and Environment Rules and Regulations", as may
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be amended, and in so doing, (1) exert its best efforts to prevent pollution and
damage to the atmosphere, oceans, rivers, lakes, harbors and land; and (2) ensure
the safety and health of its operating personnel;
m) Give preference to Philippine companies/agencies entering into subcontracts on
goods or services that are required in the Geothermal Operations but are not carried
out by the RE DEVELOPER: Provided, That the goods or services are competitive as
to cost, quality and availability;
n) Be responsible in the proper handling of data, samples, information, reports and
other documents;
o) Maintain all meters and measuring equipment in good order and allow access to
inspectors authorized by the DEPARTMENT;
p) Pay the Government Share in accordance with the computation in the Act's IRR and
taxes as may be applicable;
q) Organize Information, Education and Communication (IEC) Campaign on benefits to
the Host LGUs; and
r) Comply with all rules, regulations and guidelines issued by the DEPARTMENT and
other government agencies that are applicable hereto.
7.3 Upon the Effective Date of this RE Contract or upon the approval of the RE
DEVELOPER's New Investment, the DEPARTMENT shall issue a Certificate of Registration to the
RE DEVELOPER, to enable it to avail of the fiscal and non-fiscal incentives and privileges as
stated under the Act and its IRR. The registration shall be valid and effective for the entire term
and effectivity of this RE Contract.
SECTION VIII. REPRESENTATIONS AND WARRANTIES. —
Acknowledging that the GOVERNMENT, through the DEPARTMENT, has entered into this RE
Contract in reliance upon the representations and warranties in this Section, the RE DEVELOPER
represents and warrants as follows:
8.1 It is a corporation or entity duly formed, established, validly existing and in good
standing under the laws of the Philippines with full power to own its property; to carry on its
business as it is now being conducted; and to execute, deliver and perform its obligations under
this RE Contract, and the entering into and performance of this RE Contract by the RE
DEVELOPER does not conflict with the articles of incorporation, by-laws and other constitutive
documents of the RE DEVELOPER and has been duly authorized by all necessary corporate and
legal action on the part of the RE DEVELOPER; HDICSa
11.2 The RE DEVELOPER shall within sixty (60) days following the end of each quarter
of a Calendar or Fiscal Year remit to the DEPARTMENT the Government Share: Provided, That
any unremitted amount shall carry an interest of ten percent (10%) per annum reckoned from
the day immediately following the end of each quarter of a Calendar or Fiscal Year, as may be
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applicable.
SECTION XII. CONFIDENTIALITY. —
12.1 All documents, information, data and reports produced or generated during the
Geothermal Operations under this RE Contract shall be kept strictly confidential over the term of
this RE Contract or any extension thereof: Provided, That proprietary information shall be kept
strictly confidential at all times subject to lawful acquisitions of such information under existing
laws and regulations.
12.2 Without the written consent of the other Party, no Party shall use or disclose the
confidential information to any third party and/or to any Affiliate not directly connected with the
implementation of this RE Contract except the third parties and Affiliates in Section 12.5, and no
Party shall otherwise transfer, present, sell or publish it in any way within the confidentiality
periods.
12.3 The DEPARTMENT may use such confidential information belonging to the RE
DEVELOPER for the DEPARTMENT's resource mapping, data gathering, policy making and for
government planning purposes.
12.4 Upon the Expiration or Termination of this RE Contract, the DEPARTMENT may
provide third parties with the data and reports submitted by the RE DEVELOPER pursuant to this
Section.
12.5 Contrary stipulations notwithstanding, the RE DEVELOPER may furnish the
information to the following third parties, subsidiaries and Affiliates, such as, but not limited to:
a) Banks or other credit institutions from which finance is sought by the RE
DEVELOPER;
b) Third parties, subsidiaries and Affiliates that provide services for the Geothermal
Operations, including Subcontractors and other service contractors;
c) Prospective assignee/s to whom rights and obligations under this RE Contract are
intended to be assigned;
d) Prospective investor/s or entities with whom the RE DEVELOPER intends to enter
into joint venture or other similar agreements for the Project;
e) Governments and stock/commodity exchanges in accordance with the laws,
regulations, or rules of the relevant country or stock/commodity exchange; and
f) Government authorities, entities and judicial courts if required by law, regulation,
directive, or order, to disclose.
12.6 The information shall be revealed to those persons allowed under this RE Contract
only if and to the extent necessary and desirable for the purpose intended. Each Party shall
ensure that such person to whom information is disclosed is informed of the confidential nature
of the information and the purpose for which it may be used and that each such person is bound
by this Section.
12.7 The RE DEVELOPER and its Affiliates or the DEPARTMENT, its officers, employees,
consultants and other duly authorized representatives shall not make any public statement or
announcement of any information produced, generated or acquired in the course of the
Geothermal Operations, without prior written consent of the other Party.
SECTION XIII. PERFORMANCE BOND AND SIGNING FEE. —
13.1 The RE DEVELOPER shall pay the signing fee in the amount of ________ Pesos
(PhP_________) and post the performance bond covering the first Contract Year within fifteen (15)
and thirty (30) days, respectively, from its receipt of notice.
13.2 Failure of the RE DEVELOPER to comply with Section 13.1 hereof shall render the
COR and RE Contract to be void ab initio .
13.3 The initial amount of the bond or other guarantee as specified in Sub-section 7.2
(h) shall not be less than the annual financial commitment/budgetary estimate for the first
Contract Year based on the Work Program.
13.4 The amount of performance bond or other guarantee may be adjusted, subject to
the following conditions:
a) In the event of surrender by the RE DEVELOPER of a portion of the Contract Area
covered by this RE Contract, the performance bond or other guarantee shall be
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reduced proportionately in accordance with the Work Program;
b) In the event that the RE DEVELOPER has fully expended its budgetary estimate
under the Work Program but has not fully performed its work obligations, the
amount of bond or other guarantee shall be equal to the succeeding Contract Year's
budgetary estimate under the revised Work Program; and
c) Such other conditions or circumstances as would reasonably warrant the
modification of the amount of the performance bond or other guarantee.
13.5 If the RE DEVELOPER, through its own fault, fails to observe or perform its work
obligations under the Work Program, the DEPARTMENT, upon prior written notice, may proceed
against the performance bond or other guarantee: Provided, That, should the work obligations
under the Work Program be fulfilled, and through the efficiency of the RE DEVELOPER, the
corresponding actual expenditures thereon are lower than the estimated expenditures stated in
the Work Program, the same shall be considered as full compliance of the work obligations.
13.6 The DEPARTMENT shall release the performance bond or other guarantee not
later than twenty (20) working days from the date of confirmation by the DEPARTMENT on the
start of the construction of the Generation Facility. DTCSHA
(Note: The amount for signing fee/bonus shall be based on the total Contract
Area at the rate of PhP100.00/has.)
SECTION XIV. SUSPENSION AND TERMINATION. —
14.1 In case of the Pre-Development Stage, the DEPARTMENT shall have the power to
terminate this RE Contract after due notice to the RE DEVELOPER on any of the following
grounds:
a) Non-compliance with the Work Program and the material terms and conditions of
this RE Contract;
b) Non-compliance with the RE technical design standards adopted by the
DEPARTMENT;
c) Tampering, falsifying or plagiarizing of technical design and feasibility study reports;
d) Non-payment of the financial obligations agreed upon under this RE Contract; and,
e) Non-posting of performance bond or other guarantee within the period/s provided
under Section XIII (Performance Bond).
14.2 In case of the Development Stage, the DEPARTMENT shall have the power to
terminate this RE Contract after due notice to the RE DEVELOPER on any of the following
grounds:
a) Non-compliance with the approved Work Program and the material terms and
conditions of this RE Contract;
b) Violation of the Renewable Portfolio Standards Rules, as defined in the Act and its
IRR, and relevant Department Circulars;
c) Non-compliance with the RE technical design standards adopted by the
DEPARTMENT;
d) Tampering, falsifying or plagiarizing of technical design, feasibility study generation
and operation reports;
e) Non-remittance of Government Share as determined by the Compliance Division-
Financial Services of the DEPARTMENT;
f) Non-payment of the financial obligations agreed upon under this RE Contract; and
g) Non-posting of performance bond or other guarantee within the period/s provided
under Section XIII (Performance Bond).
14.3 In case the default of the RE DEVELOPER on account of any of the foregoing
grounds is attributable to Force Majeure, the obligation of the RE DEVELOPER may be suspended
for a period of one (1) year or until the Force Majeure event ceases to exist whichever comes
earlier subject to the following conditions:
a) The RE DEVELOPER shall file a notice of Force Majeure to the DEPARTMENT within
fifteen (15) calendar days from its existence;
b) After due validation which shall be made within twenty (20) working days from
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receipt of such notice, the DEPARTMENT shall issue an approval of suspension of
contractual obligation/s affected by Force Majeure;
c) The RE DEVELOPER shall continue to post the performance bond, if necessary,
observe administrative requirements and comply with reportorial obligations on its
work commitments not affected by Force Majeure;
d) Once the Force Majeure had ceased, the RE DEVELOPER shall notify the
DEPARTMENT within five (5) calendar days from cessation together with the revised
Work Program covering the remaining contract term.
e) Any failure or delay on the part of either Party in the performance of its obligations
or duties hereunder shall be excused to the extent attributable to Force Majeure.
f) If the Geothermal Operations are curtailed or prevented by such causes, then the
time for enjoying the rights and carrying out the obligations thereby affected, and all
rights and obligations hereunder shall be extended for a period equal to the period
of delay, curtailment or prevention: Provided, however, That the suspension of
obligation shall in no way extend the term of the contract. Provided, further, That if
operations are delayed, curtailed or prevented by Force Majeure for a continuous
period of twelve (12) months, this RE Contract may thereafter be terminated, at the
option of the RE DEVELOPER, at anytime that the Force Majeure condition still exists,
subject to confirmation of the DEPARTMENT; and
g) The Party whose ability to perform its obligations is so affected shall notify the other
Party thereof in writing stating the cause and such affected Party shall do all
reasonably within its power to remove such cause.
14.4 Notwithstanding the foregoing, this RE Contract shall be terminated without
prejudice to the RE DEVELOPER's obligation which survive the termination of this RE Contract.
SECTION XV. DISPUTES AND ARBITRATION. —
15.1 Any dispute, controversy or claim arising out of or relating to this RE Contract,
except Section 14.1 (a) hereof, shall be settled amicably within a period of sixty (60) days after
receipt by one Party of a notice from the other Party of the existence of the dispute.
15.2 If the dispute cannot be settled amicably within the sixty (60)-day period, the
Parties shall, with respect to disputes arising out of or in connection with Sections V (Contract
Area), VI (Work Program and Estimated Expenditures) and XI (Government Share) hereof, refer
the dispute to an independent expert for resolution in the manner provided below; Provided that
any Party, in its sole discretion, may require the dispute be referred to arbitration under Section
15.4 hereof.
15.3 The following shall govern the rules of referral: CScTED
a) After the sixty (60)-day period in Section 15.1 has passed, any Party may give
notice to the other Party of its intention to refer the dispute to an expert in
accordance with the provisions of this RE Contract;
b) The respondent shall, within twenty-one (21) days after receipt of the notice of
intention to refer, serve the applicant a notice of its intention to defend;
c) If within fourteen (14) days after the applicant's receipt of the respondent's notice of
intention to defend, the Parties have agreed on an expert and on the terms under
which the dispute shall be referred to the independent expert mentioned in Section
15.2 hereof. In the event that within such fourteen (14)-day period, the Parties are
unable to agree upon an expert to be appointed hereunder or upon the terms of
such expert's reference or both, then either Party may request the International
Chamber of Commerce (ICC) International Centre for Expertise to appoint an expert,
and the matters to be determined by such expert shall be those set out in the notice
of intention to refer and the notice of intention to defend;
d) Unless the Parties agree otherwise, any expert proceedings under this Section shall
be required to follow the ICC Rules for Expertise in force as of Effective Date;
e) The language of the expert proceedings and the expert's determinations shall be in
English;
f) The Parties hereby agree to be bound by, to perform this RE Contract in accordance
with, and to implement, as the case may be, the determination of the expert. Failure
by one Party to act shall constitute a breach of this RE Contract and shall be
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submitted to arbitration in accordance with Section 15.4 as the sole means of
enforcing the determination; and
g) Each Party shall bear the costs and expenses of all lawyers, advisors, witnesses and
employees retained by it in connection with the expert proceedings: Provided,
however, That in circumstances where the expert determines that a matter referred
to them was not subject to a bona fide dispute, the costs and expenses incurred by
the prevailing Party and the expert in connection with such matter shall be paid by
the non-prevailing Party.
15.4 If the dispute cannot be settled within sixty (60) days by mutual discussions as
contemplated in Section 15.1 hereof, and referral to an expert is neither prescribed nor elected
by the Parties with respect to any technical dispute upon written demand of either Party, the
dispute shall finally be settled by an arbitral tribunal (the "Tribunal") governed by and conducted
in accordance with the ICC Rules of Arbitration (the "Rules") in force as of Effective Date (or such
Rules as may be in force at the time such arbitration is commenced), as follows:
a) The RE DEVELOPER will nominate one (1) arbitrator and the DEPARTMENT will
nominate one (1) arbitrator within thirty (30) days from the date of a request by
either Party to initiate arbitration. The two Party-nominated arbitrators will then
jointly nominate a third arbitrator within thirty (30) days from the date of the
appointment of the second arbitrator, to act as Chairman of the Tribunal. Arbitrators
not nominated within the time limits set forth in the preceding sentence shall be
appointed by the ICC Court of International Arbitration;
b) Unless otherwise agreed by the Parties, the venue of the arbitration shall be in
Metro Manila, Philippines;
c) The language of the arbitration and award shall be in English;
d) The Tribunal shall not be authorized to impose, and either Party shall not be
authorized to seek from any judicial authority, any requirement that the Party posts
security for the costs of either Party; and
e) The decision of the Tribunal shall be final and binding upon the Parties. Judgment
upon the award rendered may be entered into any court having jurisdiction, or
application may be made to such court for a judicial acceptance of the award and an
order of enforcement, as the case may be.
15.5 The right to arbitrate disputes under this RE Contract shall survive the Expiration
or Termination of this RE Contract.
SECTION XVI. EMPLOYMENT, TRAINING AND DEVELOPMENT PROGRAMS. —
16.1 The RE DEVELOPER agrees to give preference in employment to qualified Filipino
Employees who are residents of Host LGUs and will undertake the development and training of
Filipino Employees for labor and staff positions, including administrative, technical and
executive management positions. In the course of its operations, the RE DEVELOPER shall
maintain as much as possible, an equal percentage men and women employees and accord
them equal access to development and training programs. In no case shall an employee be
denied employment and access to such development and training programs on the basis of sex
and/or gender.
16.2 During the Pre-Development Stage, the RE DEVELOPER shall, upon request of the
DEPARTMENT, provide development assistance in kind in the amount of Two Hundred Thousand
Pesos (PhP200,000.00). Upon confirmation of the Declaration of Commerciality, the RE
DEVELOPER shall, upon request of the DEPARTMENT, provide development assistance in kind in
the amount of __________ Pesos (PhP__________).
16.3 During the Pre-Development Stage, the RE DEVELOPER shall provide assistance
for training programs, conferences, seminars and other similar activities for the DEPARTMENT's
personnel in the amount of ___________ Thousand Pesos (PhP__________) per Contract Year. Upon
confirmation of the Declaration of Commerciality, the RE DEVELOPER shall, upon request of the
DEPARTMENT, provide assistance for training programs, conference seminars and other similar
activities for the DEPARTMENT's personnel in the amount of _________ Pesos (PhP__________) per
Contract Year. This assistance shall be accumulated for the succeeding Contract Years if not
availed of in a given Contract Year. The RE DEVELOPER shall pay the unutilized amount of the
training commitment prior to the Expiration or Termination of this RE Contract. cDCEIA
b) The DEPARTMENT shall have the right to inspect the RE DEVELOPER's books and
accounts directly relating to this RE Contract for any Calendar or Fiscal Year thirty-
six (36) months following the end of each Calendar or Fiscal Year. Any such audit
shall be completed within twenty-four (24) months from its commencement. Any
exceptions must be made to the RE DEVELOPER in writing within ninety (90)
calendar days following the completion of such audit. If the DEPARTMENT fails to
give such written exception within such time, then the RE DEVELOPER's books of
accounts and statements for such Calendar or Fiscal Year shall be established as
correct and final for all purpose.
c) The DEPARTMENT, upon at least fifteen (15) days advance written notice to the RE
DEVELOPER, is entitled to access, during reasonable hours without affecting
Geothermal Operations, all books of accounts and records and may inspect such
sites and facilities as necessary.
d) If the DEPARTMENT notifies the RE DEVELOPER of an exception to the RE
DEVELOPER's books of accounts within the period specified in Sub-section 17.6 (b),
the RE DEVELOPER shall within ninety (90) days from receipt of written exception
from the DEPARTMENT, question its validity, otherwise, the same shall become final
and binding on the RE DEVELOPER. If the Parties are not able to agree on the
exceptions or adjustments after ninety (90) days from the date of receipt of the RE
DEVELOPER's response to the DEPARTMENT's exception report, the Parties shall
resolve the dispute in accordance with Section XV (Disputes and Arbitration) hereof.
17.6 SEPARABILITY CLAUSE
Should any provision of this RE Contract or the application thereof to any situation or
circumstance be declared null and void and/or invalid or unenforceable, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall remain valid and
enforceable to the fullest extent. In the event of such partial invalidity or unenforceability, the
Parties shall seek in good faith to agree on replacing the invalid or unenforceable provisions with
a provision that in effect will most nearly and fairly approximate the effect of the invalid or
unenforceable provision through the issuance of appropriate supplemental contract/s or
agreement/s.
IN WITNESS WHEREOF, the Parties have caused this RE Contract to be executed by their
respective representatives at the place and on the date above written.
By: By:
___________________________ ___________________________
NAME PRINCIPAL SIGNATORY
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Secretary Designation
WITNESSES
___________________________ ___________________________
NAME NAME OF WITNESS
Director IV, REMB Designation
ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES )
CITY OF TAGUIG ) S.S.
Before me, a Notary Public duly authorized in the City of Taguig, this _______________,
personally appeared:
Competent Date
Name Evidence and
of Identity Place of
Issuance
DOE
SECRETARY
known to be the same person described in the foregoing instrument, who acknowledged before
me that his/her signature on the instrument was voluntarily affixed by him/her for the purposes
stated therein, and who declared to me that he/she executed the instrument as his/her free and
voluntary act and deed as well as the free and voluntary act and deed of the government agency
herein represented.
This RE Contract consisting of twenty-five (25) pages, including the page on which this
acknowledgment is written, is signed on each and every page thereof by the Parties and their
instrumental witnesses and sealed with my notarial seal.
WITNESS MY HAND AND SEAL on ________________ at ________________.
NOTARY PUBLIC
Doc. No. _________;
Page No. _________;
Book No. _________;
Series of _________.
ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES )
CITY OF TAGUIG ) S.S.
Before me, a Notary Public duly authorized in the City of Taguig, this __________, personally
appeared:
Competent
Date and Place of
Name Evidence of
Issuance
Identity
DATE/Place of
FULL NAME ID/ID No.
Issuance
known to be the same person described in the foregoing instrument, who acknowledged before
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me that his/her signature on the instrument was voluntarily affixed by him/her for the purposes
stated therein, and who declared to me that he/she executed the instrument as his/her free and
voluntary act and deed as well as the free and voluntary act and deed of the corporation herein
represented.
This RE Contract consisting of twenty-five (25) pages, including the page on which this
acknowledgment is written, is signed on each and every page thereof by the Parties and their
instrumental witnesses and sealed with my notarial seal. TEHIaD
NOTARY PUBLIC
Doc. No. _________;
Page No. _________;
Book No. _________;
Series of _________.
ANNEX C
Work Program
Solar Energy Operating Contract
(SEOC No. 20___-___-____)
This SOLAR ENERGY OPERATING CONTRACT (this "RE Contract"), made and entered
into this DATE OF EXECUTION in Bonifacio Global City, Taguig City by and between:
The REPUBLIC OF THE PHILIPPINES, hereinafter referred to as "GOVERNMENT,"
through the "Department of Energy," hereinafter referred to as the
"DEPARTMENT," a government agency established pursuant to Republic Act No.
7638, as amended, with principal office address at the Energy Center, Rizal Drive,
Bonifacio Global City, Taguig City, Metro Manila, represented herein by its Secretary,
Name;
-and-
COMPANY NAME hereinafter referred to as the "RE DEVELOPER," a corporation
duly organized and existing under the laws of the Republic of the Philippines, with
principal office address at Company Address represented herein by its Designation,
Name;
Each of the DEPARTMENT and the RE DEVELOPER is referred to as a "Party," and
collectively as the "Parties." In the implementation of this RE Contract, the GOVERNMENT
shall act through and be represented by the DEPARTMENT.
WITNESSETH:
WHEREAS, all forces of potential energy in public and/or private lands, within the
Philippine territory, belong to the State and their exploration, development and utilization are
governed by Section 2, Article XII of the 1987 Constitution;
WHEREAS, under Republic Act No. 7638, as amended, otherwise known as the
Department of Energy Act of 1992, the DEPARTMENT shall establish and administer programs
for the exploration, development and utilization of energy resources, including Solar Energy
Resources;
WHEREAS, under Republic Act No. 9513, otherwise known as the Renewable Energy Act
of 2008 (the "Act"), the exclusive right to explore and develop a particular renewable energy
area shall be through a Renewable Energy Service/Operating Contract ("RE Contract");
WHEREAS, Section 5 of the Act declares that the DEPARTMENT shall be the lead agency
mandated to implement its provisions;
WHEREAS, pursuant to the Act, the RE DEVELOPER has agreed to enter into this RE
Contract with the DEPARTMENT covering the Contract Area for the Project with the
corresponding rights and obligations stipulated herein;
WHEREAS, the RE DEVELOPER intends to engage in the development and utilization of
solar energy resource within the Contract Area and agrees to be subject to the laws and decrees
of the GOVERNMENT and other rules and regulations of the DEPARTMENT in the
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implementation of this RE Contract;
WHEREAS, the RE DEVELOPER has been determined by the DEPARTMENT to be legally,
technically, and financially qualified to enter into this RE Contract;
NOW, THEREFORE, for and in consideration of the terms and conditions set forth herein,
the Parties hereby stipulate and agree as follows:
SECTION I. SCOPE. —
1.1 This RE Contract is entered into, with the services, technology and financing to be
furnished by the RE DEVELOPER for its conduct of Solar Energy Operations, in an economically
viable manner and in accordance with this RE Contract.
1.2 The provisions of this RE Contract shall govern the development, construction,
installation, commissioning and operation of a Solar Energy System located in Municipality,
Province that will generate electrical power from Solar Energy System.
1.3 This RE Contract shall cover the Contract Area only as provided under Section IV
(Contract Area) hereof.
1.4 The RE DEVELOPER is hereby appointed and constituted by the DEPARTMENT as
the Party having the exclusive right to develop and utilize the Solar Energy Resources within the
Contract Area defined herein.
1.5 The RE DEVELOPER may pursue any Additional Investment or New Investment
within the Contract Area and shall be solely responsible for providing the necessary services,
technology, equipment and financing therefor. In case of New Investment, the Parties shall enter
into a new RE Contract at the option of the RE DEVELOPER, subject to approval of the
DEPARTMENT. DETACa
1.6 The RE DEVELOPER shall assume all the technical and financial risks under this RE
Contract without any guarantee from the GOVERNMENT and shall not be entitled to
reimbursement for any expense incurred in connection with this RE Contract.
SECTION II. DEFINITION OF TERMS. —
2.1 The words and terms under this RE Contract, unless otherwise specified in the Act
and its IRR or in relevant laws and regulations, shall have the meaning in accordance with the
following definitions:
a) "Abandonment and Termination Plan " refers to the plan prepared by the RE
DEVELOPER submitted within five (5) years from Effective Date and approved by the
Department of Environment and Natural Resources (DENR) and the DEPARTMENT for
the decommissioning, abandonment and surface restoration or rehabilitation of the
Contract Area, and such abandonment work plan may be amended, supplemented
or modified by the Parties from time to time;
b) "Accounting Procedures" refers to the set of procedures, guidelines, and
arrangement between the Parties, and any amendments thereto, to govern the
applicable treatment of expenses, costs, and income, set forth in Annex "B" hereof,
which forms an integral part of this RE Contract;
c) "Additional Investment" refers to investments relating to improvements,
modernization, rehabilitation, or expansion duly registered with the DEPARTMENT,
subject to the conditions to be determined by the DEPARTMENT, such as, but not
limited to, the following:
i. Identification of and investment in sequential phases/stages of production, or
undertaking scheduled modernization and/or rehabilitation of the Solar Energy
Systems; and
ii. Improvements to the Solar Energy Systems such as reduced
production/operational costs, increased production, improved operational
efficiency, and better reliability of the Project;
d) "Affiliate" refers to any person or group of persons, directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common control
with, the RE DEVELOPER. As used herein, "control" shall mean the power to direct or
cause the direction of the management's policies of a person by contract, agency or
otherwise;
e) "Certificate of Registration" refers to that certification issued to the RE
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DEVELOPER upon the Effective Date of this RE Contract or upon approval of New
Investment, to serve as the basis for its entitlement to the incentives provided under
the Act;
f) "Commercial Operation" refers to the phase commencing at the operation of the
RE Project, following the successful testing and commissioning of the RE Project, and
confirming its readiness to inject power into the grid to sell or supply its produced
energy, as duly confirmed by the DEPARTMENT and other relevant regulatory
bodies;
g) "Contract Area" refers to an area where the RE DEVELOPER is given the exclusive
right to explore and develop RE resources and which is more particularly described
in a map with its technical description attached herein as Annex "A" and made an
integral part of this RE Contract;
h) "Contract Year " refers to a period of twelve (12) consecutive calendar months
counted from the Effective Date of this RE Contract and thereafter, from the
anniversary of such Effective Date.
i) "Corporate Income Tax " refers to the tax imposed upon net taxable income under
the National Internal Revenue Code (NIRC) of 1997, as amended by Republic Act No.
9337 and the Act. Upon the lapse of the Income Tax Holiday (ITH) under the Act, the
RE DEVELOPER shall be subject to a Corporate Income Tax rate of ten percent
(10%);
j) "Cost of Goods Sold" refers to all business expenses directly incurred in the
exploration, development and utilization of the Solar Energy Resources in order to
produce and sell electricity and transmit the same to its intended location and use,
which expenses are particularly described in Annex "B" hereof;
k) "Effective Date " refers to the date of the execution of this RE Contract subject to
the payment of the signing fee and the posting of the performance bond covering
the first Contract Year as provided hereunder;
l) "Expatriate Expert" refers to a foreign national engaged by the RE DEVELOPER
and/or its Subcontractor/s involved in the Solar Energy Operations, who shall
exercise his technical profession, as allowed under existing laws;
m) "Expiration" refers to either the lapse of the term of this RE Contract as provided
in Section III (Term) hereof or the surrender, abandonment or waiver of the RE
DEVELOPER of the entire Contract Area including the abandonment thereof to the
DEPARTMENT;
n) "Filipino Employee" refers to any citizen of the Republic of the Philippines engaged
by the RE DEVELOPER and/or its Subcontractor/s for its Solar Energy Operations
under this RE Contract, and such engagement is characterized as establishing an
employer-employee relationship between such citizen and RE DEVELOPER;
o) "Force Majeure" refers to extraordinary events not foreseeable or avoidable,
events that could not be foreseen, or which, though foreseen, are inevitable;
p) "Generation Facility" refers to a facility for the production of electricity and/or
thermal energy, such as, but not limited to, steam, hot or cold water;TaDCEc
q) "Government Share" refers to the amount due the national government and LGUs
from the exploration, development and utilization of the Solar Energy Resources
computed in accordance with the Act and its Implementing Rules and Regulations
(IRR), and described in Section XI (Government Share) hereof;
r) "Gross Income" refers to income derived from the RE DEVELOPER's Solar Energy
Operations equivalent to the gross sales of Solar Energy less sales returns, discounts
and allowance, and Cost of Goods Sold, which is more particularly described in the
Accounting Procedures attached as Annex "B";
s) "Host LGU" refers to the LGU where the Solar Energy Resources and/or Generation
Facility is located;
t) "Local Government Units/LGU" refers to the territorial and political subdivisions of
the State which organization and function are fully described under the Local
Government Code of 1991;
u) "New Investment" refers to investments relating to discovery, exploration,
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development and/or utilization of new RE resources or the development of new
Generation Facilities within the Contract Area distinct from the originally registered
operations having separate books of accounts;
v) "Production Area" refers to that portion of the Contract Area designated by the RE
DEVELOPER whore Solar Energy Resources are utilized to produce electricity;
w) "Project" refers to the RE DEVELOPER's Solar Energy Systems within the Contract
Area, which may be implemented in one or more phases;
x) "RE Contract" refers to this Solar Energy Operating Contract, as may be amended
or extended by the Parties and shall have the same meaning as provided under the
Act;
y) "Solar Energy" refers to the energy that can be derived from solar radiation that
can be converted into useful thermal or electrical energy;
z) "Solar Energy Operations " shall include Solar Energy exploration, development,
production, and utilization, including the construction, installation, operation and
maintenance of Solar Energy Systems to convert Solar Energy to electrical power
and the transmission of such electrical power and/or other non-electrical uses;
aa) "Solar Energy Resources" refers to the solar resources found within the Contract
Area to be technically feasible for the development of Solar Energy projects;
bb) "Solar Energy Systems" refers to the energy systems that convert solar energy
into thermal or electrical energy;
cc) "Subcontractor" refers to any person or entity contracted by the RE DEVELOPER
to provide goods or services for the purpose of this RE Contract, subject to the
provisions of existing laws;
dd) "Termination" refers to the right of the Parties to cancel this RE Contract pursuant
to Section XIII (Suspension and Termination) hereof; and
ee) "Work Program" refers to all types of plans and programs and related activities
formulated for the performance of the work obligations by the RE DEVELOPER, along
with the corresponding budgetary estimate, submitted to the DEPARTMENT under
this RE Contract, attached hereto as Annex "C" and shall thereafter be updated on a
regular basis.
SECTION III. TERM. —
3.1 From the Effective Date, the term of this RE Contract shall be twenty-five (25)
years.
3.2 At the option of the RE DEVELOPER, the term of this RE Contract may be extended
for another twenty-five (25) years, subject to the approval of the DEPARTMENT. The RE
DEVELOPER shall request the DEPARTMENT, in writing and not later than one (1) year prior to
the expiration of the initial term, for an extension of the term. The extension of the term of this
RE Contract shall be governed by such terms and conditions to be mutually agreed upon by the
Parties.
SECTION IV. CONTRACT AREA. —
4.1 The Contract Area refers to the areas as described in Annex "A" hereof, which the
RE DEVELOPER has exclusive right to explore, develop and utilize the Solar Energy Resources in
accordance with this RE Contract.
4.2 The RE DEVELOPER may, upon submission of written notice to the DEPARTMENT,
surrender or waive the entire Contract Area or any portion thereof without prejudice to any other
outstanding liability or costs. In case the RE DEVELOPER completely ceases its operations, the
provisions under its Abandonment and Termination Plan shall apply consistent with its
Environmental Compliance Certificate (ECC).
SECTION V. WORK PROGRAM. —
5.1 The RE DEVELOPER shall carry out its existing work according to good industry
practices.
5.2 Attached to this RE Contract is a Work Program, details of which are particularly
described in Annex "C" hereof.
5.3 Not later than two (2) months prior to the end of the first five (5) years Work
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Program, the RE DEVELOPER shall submit a Work Program for the next five (5) years and shall do
so every next five (5) years thereafter. The Work Program or any revisions thereof shall require
the approval of the DEPARTMENT. cDEHIC
5.4 During the implementation of the Work Program, the RE DEVELOPER shall submit
for evaluation and approval by the DEPARTMENT, a request for any revisions to the Work
Program upon determination of such revision. The DEPARTMENT shall act on the request for
revision and thereafter, the RE DEVELOPER may proceed to implement the activity without
violating the provisions on the Work Program: Provided, That revision shall not be allowed within
the first two (2) Contract Years. Provided, further, That the RE DEVELOPER shall be allowed to
subsequently revise its Work Program only if it has substantially complied with all its material
financial and technical activities under the Work Program for the immediate preceding Contract
Year and such revision shall be allowed only once per Contract Year.
5.5 In the event of failure of the RE DEVELOPER to comply with its commitments under
the Work Program, the DEPARTMENT shall call the performance bond posted by the RE
DEVELOPER. This is without prejudice to the right of the DEPARTMENT to terminate the RE
Contract.
SECTION VI. RIGHTS AND OBLIGATIONS. —
6.1 The RE DEVELOPER shall have the following rights:
a) To be granted fiscal and non-fiscal incentives and privileges under the Act, the IRR
and all other existing laws that are not otherwise modified or repealed by the Act;
b) To receive assistance from the DEPARTMENT in endorsing the Project to the other
agencies of the National Government, LGUs, Board of Investments (BOI) and other
entities for the acquisition of permits, licenses and clearances and availment of
applicable fiscal and non-fiscal incentives;
c) Have at all times the right of ingress to and egress from the Contract Area to and
from facilities wherever located;
d) Acquire rights-of-way and similar rights on, over, under, across and through the
Contract Area or properties adjacent to the Contract Area, which constitute or is
reasonably expected to constitute the Contract Area as the RE DEVELOPER may
reasonably deem necessary.
The DEPARTMENT shall, upon request by the RE DEVELOPER as may be reasonable
given the attendant circumstances, assist the RE DEVELOPER in securing such
rights. For such purpose, the DEPARTMENT shall and does hereby appoint the RE
DEVELOPER as its attorney-in-fact and does hereby give and grant to the RE
DEVELOPER full authority to act for and on its behalf in the negotiation and
conclusion of agreements and payments for such rights. All obligations, payments
and expenses arising from or incidental to the acquisition of such rights shall be for
the account of the RE DEVELOPER so as to enable the RE DEVELOPER to have
ingress into and egress from the Contract Area and to perform all Solar Energy
Operations in accordance with this RE Contract and in consideration of which,
entitlement to such rights shall be held in trust in favor of the RE DEVELOPER.
The DEPARTMENT undertakes to provide further assistance to the RE DEVELOPER,
including the exercise of the power of eminent domain if necessary, to secure such
necessary or proper rights at such cost for the account of the RE DEVELOPER, if the
RE DEVELOPER is unable to secure such rights at commercially reasonable costs
through negotiations or if the same is the most expedient course of action to support
the timely execution of Solar Energy Operations;
e) Allow, in accordance with the existing laws, to engage the services Expatriate
Experts who shall exercise their technical professions solely for the Solar Energy
Operations: Provided, That, Filipino Employees shall be given preference to positions
for which they have adequate training and experience required by the RE
DEVELOPER, and Provided, further, That if the employment or connection of such
Expatriate Experts with the RE DEVELOPER ceases, applicable laws and regulations
shall apply to them and their immediate family;
f) Have a free and unimpeded use of Solar Resources within the Contract Area in view
of the Solar Operations, Additional Investments and New Investments in regard of
which, the DEPARTMENT shall ensure that rights, privileges and other authorizations
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it may grant to third parties will not defeat or impair such use; and
g) Be informed by the DEPARTMENT, if at any time the latter becomes aware of any
intended exploration, extraction or use of energy resources other than Solar
Resources on the Contract Area, within thirty (30) days from the date it becomes
aware of such intended exploration, extraction or other use.
6.2 The RE DEVELOPER shall have the following obligations:
a) Within the period of the first five (5)-year Work Program, the RE DEVELOPER shall
develop, construct, install, commission and operate the Solar Energy System in the
Project Site.
b) Secure and be subject to any necessary permits, licenses, endorsements,
agreements and clearances from all relevant government and private entities for the
Project;
c) Comply with all its work and financial commitments in carrying out its obligations
under this RE Contract and provide all necessary services, technology and financing
in connection therewith;
d) Perform the required Solar Energy Operations and provide services, technology, and
financing in connection therewith;
e) Maintain complete and accurate accounting, financial and technical records of its
Solar Energy Operations, subject to Sections IX (Data and Reports) and XI
(Confidentiality), and in accordance with the Accounting Procedures as provided
under Annex "B" hereof;
f) Allow officials and representatives authorized by the DEPARTMENT access to the
Contract Area, and to the accounts, books and records directly relating to the Solar
Energy Operations during reasonable hours and without causing disruption. The RE
DEVELOPER shall provide such reasonable facilities and assistance as may be
practicable to ensure the success of the inspection;
g) Give priority in employment to qualified personnel in the Host LGU subject to
Section XV (Employment, Training and Development Programs) hereof; ISCDEA
h) At the start of every Contract Year, post a performance bond or any other guarantee
of sufficient amount but not less than the annual budgetary estimate for the
corresponding Contract Year in favor of the DEPARTMENT from a list of
DEPARTMENT-accredited insurance or surety companies. The posting of performance
bond shall be conditioned upon the faithful performance by the RE DEVELOPER of
any or all of the commitments and obligations under the Work Program until the
commencement of the construction of the Generation Facility;
Upon the commencement of the construction of the Generation Facility, the RE
DEVELOPER shall notify the DEPARTMENT of such fact and the latter shall verify the
same. Thereafter, the obligation to post the bond shall cease;
i) After availing of the ITH, be subject to Corporate Income Tax: Provided, That New or
Additional Investment shall be eligible for ITH;
j) Be subject to the provisions of law of general application;
k) Develop, operate and maintain the Contract Area in accordance with accepted
industry practices to enable maximum economic production of the Solar Energy
Resources;
l) Be responsible for procurement of installation, equipment and supplies, and for
entering into subcontracts related to the Solar Energy Operations;
m) Comply with the provisions of Department Circular No. DC2012-11-0009 entitled
"Renewable Energy Safety, Health and Environment Rules and Regulations," as may
be amended, and in so doing, (1) exert its best efforts to prevent pollution and
damage to the atmosphere, oceans, rivers, lakes, harbors and land; and (2) ensure
the safety and health of its operating personnel;
n) Give preference to Philippine companies/agencies entering into subcontracts on
goods or services that are required in the Solar Energy Operations but are not
carried out by the RE DEVELOPER; Provided, That the goods or services are
competitive as to cost, quality and availability;
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o) Be responsible in the proper handling of data, samples, information, reports and
other documents;
p) Maintain all meters and measuring equipment in good order and allow access to
inspectors authorized by the DEPARTMENT;
q) Pay the Government Share in accordance with the computation in the Act's IRR and
taxes as may be applicable;
r) Organize Information, Education and Communication (IEC) Campaign on benefits to
the Host LGUs; and
s) Comply with all rules, regulations, and guidelines issued by the DEPARTMENT and
other government agencies that are applicable hereto.
6.3 Upon the Effective Date of this RE Contract or upon the approval of the RE
DEVELOPER's New Investment, the DEPARTMENT shall issue a Certificate of Registration to the
RE DEVELOPER, to enable it to avail of the fiscal and non-fiscal incentives and privileges as
stated under the Act and its IRR. The registration shall be valid and effective for the entire term
and effectivity of this RE Contract.
SECTION VII. REPRESENTATIONS AND WARRANTIES. —
Acknowledging that the GOVERNMENT, through the DEPARTMENT, has entered into this RE
Contract in reliance upon the representations and warranties in this Section, the RE DEVELOPER
represents and warrants as follows:
7.1 It is a corporation or entity duly formed, established, validly existing and in good
standing under the laws of the Philippines with full power to own its property; to carry on its
business as it is now being conducted; and to execute, deliver and perform its obligations under
this RE Contract, and the entering into and performance of this RE Contract by the RE
DEVELOPER does not conflict with the articles of incorporation, by-laws and other constitutive
documents of the RE DEVELOPER and has been duly authorized by all necessary corporate and
legal action on the part of the RE DEVELOPER;
7.2 There is no litigation, arbitration or administrative proceeding pending or, to the
best knowledge of the RE DEVELOPER, threatened against the RE DEVELOPER or its properties
the adverse determination of which would adversely affect the ability of the RE DEVELOPER to
perform or comply with any of its material obligations under this RE Contract;
7.3 The RE DEVELOPER:
a) Has not been declared in default in respect of any of its material financial
commitments or obligations based on their reports duly validated by the
DEPARTMENT;
b) Is not otherwise in default of any kind in respect of any financial commitment or
obligation or in respect of any agreement, undertaking or instrument as a party
thereof by which it or any of its assets or properties may be bound; and
c) Is not aware of a fact that by the service of notice and/or lapse of time would
constitute a default in any or both of sub-paragraphs (a) and (b) above;
7.4 No written material information given by the RE DEVELOPER to the DEPARTMENT
under this RE Contract contains any misstatement of fact as of the Effective Date or omits to
state a fact that is materially adverse to the interests of the DEPARTMENT; and
7.5 The ownership of the RE DEVELOPER's capital stock complies with applicable laws
and regulations. EDCTIa
c) Prospective assignee/s to whom rights and obligations under this RE Contract are
intended to be assigned;
d) Prospective investor/s or entities with whom the RE DEVELOPER intends to enter
into joint venture or other similar agreements for the Project;
e) Governments and stock/commodity exchanges in accordance with the laws,
regulations, or rules of the relevant country or stock/commodity exchange; and
f) Government authorities, entities and judicial courts if required by law, regulation,
directive, or order, to disclose.
11.6 The information shall be revealed to those persons allowed under this RE Contract
only if and to the extent necessary and desirable for the purpose intended. Each Party shall
ensure that such person to whom information is disclosed is informed of the confidential nature
of the information and the purpose for which it may be used and that each such person is bound
by this Section.
11.7 The RE DEVELOPER and its Affiliates or the DEPARTMENT, its officers, employees,
consultants and other duly authorized representatives shall not make any public statement or
announcement of any information produced, generated or acquired in the course of the Solar
Energy Operations, without prior written consent of the other Party.
SECTION XII. PERFORMANCE BOND AND SIGNING FEE. —
12.1 The RE DEVELOPER shall pay the signing fee in the amount of __________ Pesos
(PhP________) and post the performance bond covering the first Contract Year within fifteen (15)
and thirty (30) days, respectively, from its receipt of notice.
12.2 Failure of the RE DEVELOPER to comply with Section 12.1 hereof shall render the
COR and RE Contract to be void ab initio .
12.3 The initial amount of the bond or other guarantee as specified in Sub-section 6.2
(f) shall not be less than the annual financial commitment/budgetary estimate for the first
Contract Year based on the Work Program.
12.4 The amount of performance bond or other guarantee may be adjusted, subject to
the following conditions:
a) In the event of surrender by the RE DEVELOPER of a portion of the Contract Area
covered by this RE Contract, the performance bond or other guarantee shall be
reduced proportionately in accordance with the Work Program;
b) In the event that the RE DEVELOPER has fully expended its budgetary estimate
under the Work Program as applicable but has not fully performed its work
obligations, the amount of bond or other guarantee shall be equal to the succeeding
Contract Year's budgetary estimate under the revised Work Program; and
c) Such other conditions or circumstances as would reasonably warrant the
modification of the amount of the performance bond or other guarantee.
12.5 If the RE DEVELOPER, through its own fault, fails to observe or perform its work
obligations under the Work Program, the DEPARTMENT, upon prior written notice, may proceed
against the performance bond or other guarantee. Provided, That, should the work obligations
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under the Work Program be fulfilled, and through the efficiency of the RE DEVELOPER, the
corresponding actual expenditures thereon are lower than the estimated expenditures stated in
the Work Program, the same shall be considered as full compliance of the work obligations.
12.6 The DEPARTMENT shall release the performance bond or other guarantee not
later than twenty (20) working days from the date of confirmation by the DEPARTMENT of the
start of the start of the construction of the Generation Facility.
(Note: The amount for signature fee/bonus shall be based on the proposed
installed capacity of the Project at the rate of PhP5.00/kW).
SECTION XIII. SUSPENSION AND TERMINATION. —
13.1 The DEPARTMENT shall have the power to terminate this RE Contract after due
notice to the RE DEVELOPER on any of the following grounds:
a) Non-compliance with the Work Program and the material terms and conditions of
this RE Contract;
b) Violation of the Renewable Portfolio Standards Rules, as defined in the Act and its
IRR, and relevant Department Circulars;
c) Non-compliance with the RE technical design standards adopted by the
DEPARTMENT;
d) Tampering, falsifying or plagiarizing of technical design and feasibility study reports;
e) Non-payment of the financial obligations agreed upon under this RE Contract; and
f) Non-posting of performance bond or other guarantee within the period/s provided
under Section XII (Performance Bond) hereof;
13.2 In case the default of the RE DEVELOPER on account of any of the foregoing
grounds is attributable to Force Majeure, the obligation of the RE DEVELOPER may be suspended
for a period of one (1) year or until the Force Majeure event ceases to exist whichever comes
earlier subject to the following conditions:
a) The RE DEVELOPER shall file a notice of Force Majeure to the DEPARTMENT within
fifteen (15) calendar days from its existence;
b) After due validation which shall be made within twenty (20) working days from
receipt of such notice, the DEPARTMENT shall issue an approval of suspension of
contractual obligation/s affected by Force Majeure;
c) The RE DEVELOPER shall continue to post the performance bond, if necessary,
observe administrative requirements and comply with reportorial obligations on its
work commitments not affected by Force Majeure; ACTIHa
d) Once the Force Majeure had ceased, the RE DEVELOPER shall notify the
DEPARTMENT within five (5) calendar days from cessation together with the revised
Work Program covering the remaining contract term;
e) Any failure or delay on the part of either Party in the performance of its obligations
or duties hereunder shall be excused to the extent attributable to Force Majeure;
f) If the Solar Energy Operations are curtailed or prevented by such causes, then the
time for enjoying the rights and carrying out the obligations thereby affected, and all
rights and obligations hereunder shall be extended for a period equal to the period
of delay, curtailment or prevention: Provided, however, That the suspension of
obligation shall in no way extend the term of the contract. Provided, further, That if
operations are delayed, curtailed or prevented by Force Majeure for a continuous
period of twelve (12) months, this RE Contract may thereafter be terminated, at the
option of the RE DEVELOPER, at anytime that the Force Majeure condition still exists,
subject to confirmation of the DEPARTMENT; and
g) The Party whose ability to perform its obligations is so affected shall notify the other
Party thereof in writing stating the cause and such affected Party shall do all
reasonably within its power to remove such cause.
13.3 Notwithstanding the foregoing, this RE Contract shall be terminated without
prejudice to the RE DEVELOPER's obligation which survive the termination of this RE Contract.
SECTION XIV. DISPUTES AND ARBITRATION. —
14.1 Any dispute, controversy or claim arising out of or relating to this RE Contract,
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except Section 13.1 (a) hereof, shall be settled amicably within a period of sixty (60) days after
receipt by one Party of a notice from the other Party of the existence of the dispute.
14.2 If the dispute cannot be settled amicably within the sixty (60)-day period, the
Parties shall, with respect to disputes arising out of or in connection with Sections IV (Contract
Area), V (Work Program and Estimated Expenditures) and X (Government Share) hereof, refer
the dispute to an independent expert for resolution in the manner provided below; Provided that
any Party, in its sole discretion, may require the dispute be referred to arbitration under Section
14.4 hereof.
14.3 The following shall govern the rules of referral:
a) After the sixty (60)-day period in Section 14.1 has passed, any Party may give
notice to the other Party of its intention to refer the dispute to an expert in
accordance with the provisions of this RE Contract:
b) The respondent shall, within twenty-one (21) days after receipt of the notice of
intention to refer, serve the applicant a notice of its intention to defend;
c) If within fourteen (14) days after the applicant's receipt of the respondent's notice of
intention to defend, the Parties have agreed on an expert and on the terms under
which the dispute shall be referred to the independent expert mentioned in Section
14.2 hereof. In the event that within such fourteen (14)-day period, the Parties are
unable to agree upon an expert to be appointed hereunder or upon the terms of
such expert's reference or both, then either Party may request the International
Chamber of Commerce (ICC) International Centre for Expertise to appoint an expert,
and the matters to be determined by such expert shall be those set out in the notice
of intention to refer and the notice of intention to defend;
d) Unless the Parties agree otherwise, any expert proceedings under this Section shall
be required to follow the ICC Rules for Expertise in force as of Effective Date;
e) The language of the expert proceedings and the expert's determinations shall be in
English;
f) The Parties hereby agree to be bound by, to perform this RE Contract in accordance
with, and to implement, as the case may be, the determination of the expert. Failure
by one Party to act shall constitute a breach of this RE Contract and shall be
submitted to arbitration in accordance with Section 14.4 as the sole means of
enforcing the determination; and
g) Each Party shall bear the costs and expenses of all lawyers, advisors, witnesses and
employees retained by it in connection with the expert proceedings: Provided,
however, That in circumstances where the expert determines that a matter referred
to him was not subject to a bona fide dispute, the costs and expenses incurred by
the prevailing Party and the expert in connection with such matter shall be paid by
the non-prevailing Party.
14.4 If the dispute cannot be settled within sixty (60) days by mutual discussions as
contemplated in Section 14.1 hereof, and referral to an expert is neither prescribed nor elected
by the Parties with respect to any technical dispute upon written demand of either Party, the
dispute shall finally be settled by an arbitral tribunal (the "Tribunal") governed by and conducted
in accordance with the ICC Rules of Arbitration (the "Rules") in force as of Effective Date (or such
Rules as may be in force at the time such arbitration is commenced), as follows:
a) The RE DEVELOPER will nominate one (1) arbitrator and the DEPARTMENT will
nominate one (1) arbitrator within thirty (30) days from the date of a request by
either Party to initiate arbitration. The two Party-nominated arbitrators will then
jointly nominate a third arbitrator within thirty (30) days from the date of the
appointment of the second arbitrator, to act as Chairman of the Tribunal. Arbitrators
not nominated within the time limits set forth in the preceding sentence shall be
appointed by the ICC Court of International Arbitration;
b) Unless otherwise agreed by the Parties, the venue of the arbitration shall be in
Metro Manila, Philippines;
c) The language of the arbitration and award shall be in English; HCSAIa
d) The Tribunal shall not be authorized to impose, and either Party shall not be
authorized to seek from any judicial authority, any requirement that the Party posts
security for the costs of either Party; and
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e) The decision of the Tribunal shall be final and binding upon the Parties. Judgment
upon the award rendered may be entered into any court having jurisdiction, or
application may be made to such court for a judicial acceptance of the award and an
order of enforcement, as the case may be.
14.5 The right to arbitrate disputes under this RE Contract shall survive the Expiration
or Termination of this RE Contract.
SECTION XV. EMPLOYMENT, TRAINING AND DEVELOPMENT PROGRAMS. —
15.1 The RE DEVELOPER agrees to give preference in employment to qualified Filipino
Employees who are residents of the Host LGUs and will undertake the development and training
of Filipino Employees for labor and staff positions, including administrative, technical and
executive management positions. In the course of its operations, the RE DEVELOPER shall
maintain as much as possible, an equal percentage men and women employees and accord
them equal access to development and training programs. In no case shall an employee be
denied employment and access to such development and training programs on the basis of sex
and/or gender.
15.2 The RE DEVELOPER shall provide annual assistance for training programs,
conference, seminars and other similar activities for the DEPARTMENT's personnel in the amount
of ___________ Pesos (PhP___________) per Contract Year and shall be accumulated for the
succeeding Contract Years if not availed of in a given Contract Year. The RE DEVELOPER shall
pay the unutilized amount of the training commitment prior to the Expiration or Termination of
this RE Contract.
15.3 The RE DEVELOPER shall, upon request of the DEPARTMENT, provide
development assistance in kind in the amount of ___________ Pesos (PhP___________).
15.4 The RE DEVELOPER shall undertake corporate social responsibility projects in
Host LGU with focus in education and training of qualified and deserving beneficiaries, as
determined by the RE DEVELOPER.
(Note: The funds for training program and development assistance shall be
computed based on the proposed installed capacity of the Solar Project at the rate of
PhP5.00/kW. Projects with installed capacity of 5MW and below shall be exempt from
these financial obligations.)
SECTION XVI. MISCELLANEOUS PROVISIONS. —
16.1 NOTICES
Any notice required or given by either Party to the other Party shall be (i) in writing and
delivered personally or sent by registered or certified mail, commercial courier service to the
address designated in writing, (ii) by facsimile to the number most recently provided to such
party or such other address or fax number designated in writing by such party and (iii) by
electronic mail, to the electronic mail address designated in writing by such party or such other
electronic mail address as may be later designated in writing by such party.
Any notice or other communication so transmitted shall be deemed to have been given:
(a) on the day of delivery if delivered personally; (b) one (1) business day after delivery to a
commercial courier service; (c) five (5) days after mailing if sent by registered mail, return
receipt requested, postage prepaid; or (d) when sent by electronic mail or facsimile, using the
email address and facsimile number herein below provided if sent during normal business hours
of the recipient, and if not so confirmed, then on the next business day. All such notices shall be
addressed:
To the DEPARTMENT:
The Secretary
Department of Energy
Office Address
Email Address
Telephone/Fax Numbers
To the RE DEVELOPER:
Designation
Company Name
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Office Address
Email Address
Telephone/Fax Numbers
Any Party may substitute or change such address with prior written notice thereof to the
other Party.
16.2 GOVERNING LAW
The laws of the Republic of the Philippines shall apply to this RE Contract.
16.3 ASSIGNMENT
a) The RE DEVELOPER may assign this RE Contract to a third party subject to the prior
written approval of the DEPARTMENT. This RE Contract shall not be assigned to any
third party, unless such third party is qualified in accordance with the Act and its
IRR.
b) The RE DEVELOPER may assign or transfer part or all of its rights and/or obligations
under this RE Contract to its Affiliate upon compliance with the following provisions:
i. The RE DEVELOPER shall submit to the DEPARTMENT copies of the written
document which unequivocally shows the agreement of the parties thereat to
the assignment of the RE Contract; and
CaSAcH
By: By:
___________________________ ___________________________
NAME PRINCIPAL SIGNATORY
Secretary Designation
WITNESSES
___________________________ ___________________________
NAME NAME
REMB Director Designation
ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES )
CITY OF TAGUIG ) S.S.
Before me, a Notary Public duly authorized in the City of Taguig, this
________________________, personally appeared:
Competent
Date and Place of
Name Evidence of
Issuance
Identity
DOE SECRETARY
known to be the same person described in the foregoing instrument, who acknowledged before
me that his/her signature on the instrument was voluntarily affixed by him/her for the purposes
stated therein, and who declared to me that he/she executed the instrument as her free and
voluntary act and deed as well as the free and voluntary act and deed of the government agency
herein represented. IaHDcT
This RE Contract consisting of twenty-two (22) pages, including the page on which this
acknowledgment is written, is signed on each and every page thereof by the Party and his
instrumental witness and sealed with my notarial seal.
WITNESS MY HAND AND SEAL on ________________ at ________________.
Competent
Evidence of Date and Place of
Name
Identity Issuance
DATE/Place of
FULL NAME ID/ID No.
Issuance
known to be the same person described in the foregoing instrument, who acknowledged before
me that his/her signature on the instrument was voluntarily affixed by him/her for the purposes
stated therein, and who declared to me that he/she executed the instrument as his/her free and
voluntary act and deed as well as the free and voluntary act and deed of the corporation herein
represented.
This RE Contract consisting of twenty-two (22) pages, including the page on which this
acknowledgment is written, is signed on each and every page thereof by the Party and her
instrumental witness and sealed with my notarial seal.
WITNESS MY HAND AND SEAL on ________________ at ________________.
NOTARY PUBLIC
Doc. No. _________;
Page No. _________;
Book No. _________;
Series of _________.
ANNEX D
Hydropower Service Contract
(HSC No. ___-___-____)
This HYDROPOWER SERVICE CONTRACT (this "RE Contract"), made and entered into
this DATE OF EXECUTION in Bonifacio Global City, Taguig City by and between:
The REPUBLIC OF THE PHILIPPINES, hereinafter referred to as "GOVERNMENT,"
through the "Department of Energy," hereinafter referred to as the
"DEPARTMENT," a government agency established pursuant to Republic Act No.
7638, as amended, with principal office address at the Energy Center, Rizal Drive,
Bonifacio Global City, Taguig City, Metro Manila, represented herein by its Secretary,
Name;
-and-
COMPANY NAME, hereinafter referred to as the "RE DEVELOPER," a corporation
duly organized and existing under the laws of the Republic of the Philippines, with
principal office address at Company Address, represented herein by its Designation,
Name.
Each of the DEPARTMENT and the RE DEVELOPER is referred to as a "Party," and
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collectively as the "Parties." In the implementation of this RE Contract, the GOVERNMENT
shall act through and be represented by the DEPARTMENT.
WITNESSETH:
WHEREAS, all forces of potential energy in public and/or private lands, within the
Philippine territory, belong to the State and their exploration, development and utilization are
governed by Section 2, Article XII of the 1987 Constitution;
WHEREAS, under Republic Act No. 7638, as amended, otherwise known as the
Department of Energy Act of 1992, the DEPARTMENT shall establish and administer programs
for the exploration, development and utilization of energy resources, including Hydropower
Resources;
WHEREAS, under Republic Act No. 9513, otherwise known as the Renewable Energy Act
of 2008 (the "Act"), the exclusive right to explore and develop a particular renewable energy
area shall be through a Renewable Energy Service/Operating Contract ("RE Contract");
WHEREAS, pursuant to the Act, the RE DEVELOPER has agreed to enter into this RE
Contract with the DEPARTMENT covering the Contract Area for the Project with the
corresponding rights and obligations stipulated herein;
WHEREAS, the RE DEVELOPER has been determined by the DEPARTMENT to be legally,
technically, and financially qualified to enter into this RE Contract;
NOW, THEREFORE, for and in consideration of the terms and conditions set forth herein,
the Parties hereby stipulate and agree as follows: DEIHAa
SECTION I. SCOPE. —
1.1 This RE Contract is entered into, with the services, technology and financing to be
furnished by the RE DEVELOPER for its conduct of Hydropower Operations, in an economically
viable manner.
1.2 This RE Contract shall cover the Contract Area only as provided under Section V
(Contract Area) hereof.
1.3 The RE DEVELOPER is hereby appointed and constituted by the DEPARTMENT as
the Party having the exclusive right to explore, develop, and utilize the Hydropower Resources
within the Contract Area as defined herein.
1.4 The RE DEVELOPER may pursue any Additional Investment or New Investment
within the Contract Area and shall be solely responsible for providing the necessary services,
technology, equipment and financing therefor. In case of New Investment, the Parties shall enter
into a new RE Contract at the option of the RE DEVELOPER, subject to approval of the
DEPARTMENT.
1.5 The RE DEVELOPER shall assume all the technical and financial risks under this RE
Contract without any guarantee from the GOVERNMENT and shall not be entitled to
reimbursement for any expense incurred in connection with this RE Contract.
SECTION II. DEFINITION OF TERMS. —
2.1 The words and terms under this RE Contract, unless otherwise specified in the Act
and its IRR or in relevant laws and regulations, shall have the meaning in accordance with the
following definitions:
a) "Abandonment and Termination Plan " refers to the plan prepared by the RE
DEVELOPER submitted not later than three (3) months from Effective Date in the
case of Pre-Development Stage and five (5) years from confirmation of the
Declaration of Commerciality and approved by the Department of Environment and
Natural Resources (DENR) and the DEPARTMENT for the decommissioning,
abandonment and surface restoration or rehabilitation of the Contract Area, and
such abandonment work plan may be amended, supplemented or modified by the
Parties from time to time;
b) "Accounting Procedures" refers to the set of procedures, guidelines, and
arrangement between the Parties, and any amendments thereto, to govern the
applicable treatment of expenses, costs, and income, set forth in Annex "B", which
forms an integral part of this RE Contract;
c) "Additional Investment" refers to investments relating to improvements,
modernization, rehabilitation, or expansion duly registered with the DEPARTMENT,
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subject to the conditions to be determined by the DEPARTMENT, such as, but not
limited to, the following:
i. Identification of and investment in sequential phases/stages of production, or
undertaking scheduled modernization or rehabilitation of the Hydropower
Systems; and
ii. Improvements to the Hydropower Systems such as reduced
production/operational costs, increased production, improved operational
efficiency, and better reliability of the Project;
d) "Affiliate" refers to any person or group of persons, directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common control
with, the RE DEVELOPER. As used herein, "control" shall mean the power to direct or
cause the direction of the management's policies of a person by contract, agency or
otherwise;
e) "Certificate of Confirmation of Commerciality " or "COCOC" shall refer to the
certificate duly signed by the DOE Secretary confirming the Declaration of
Commerciality by the RE DEVELOPER and shall serve as notice to proceed for the
construction of the RE Project or the installation of the RE Facilities. The date of
issuance of the COCOC shall be considered as the commencement date of the
Development Stage of the RE Project;
f) "Certificate of Registration" refers to that certification issued to the RE
DEVELOPER upon the Effective Date of this RE Contract or upon approval of New
Investment, to serve as the basis for its entitlement to the incentives provided under
the Act;
g) "Commercial Operation" shall refer to the phase commencing at the operation of
the RE Project, following the successful testing and commissioning of the RE Project,
and confirming its readiness to inject power to the grid to sell or supply its produced
energy, as duly confirmed by the DEPARTMENT and other relevant regulatory
bodies;
h) "Commercial Quantities" shall mean quantities of electricity to be generated
using commercially viable technology to develop the Hydropower Resources
providing, or capable of providing, revenue from sales of electricity that exceed or
would exceed the RE DEVELOPER's Cost of Goods Sold by a margin sufficient to
cause a reasonably prudent person employing standard industry practices as to
hydropower resources and using commercially available technology to develop the
Hydropower Systems;
i) "Contract Area" refers to an area where the RE Developer is given the exclusive
right to explore and develop RE resources and which is more particularly described
in a map with its technical description attached herein as Annex "A" and made an
integral part of this RE Contract;
j) "Contract Year " refers to a period of twelve (12) consecutive calendar months
counted from the Effective Date of this RE Contract and thereafter, from the
anniversary of such Effective Date; DcHSEa
k) "Corporate Income Tax" refers to the tax imposed upon net taxable income under
the National Internal Revenue Code (NIRC) of 1997, as amended by Republic Act No.
9337 and the Act. Upon the lapse of the period of the Income Tax Holliday (ITH)
under the Act, the RE DEVELOPER shall be subject to a Corporate Income Tax rate of
ten percent (10%);
l) "Cost of Goods Sold" refers to all business expenses directly incurred in the
exploration, development, and utilization of the Hydropower Resources in order to
produce and sell electricity and transmit the same to its intended location and use,
which expenses are particularly described in Annex "B" hereof;
m) "Declaration of Commerciality" refers to a written declaration by the RE
DEVELOPER stating that the electricity to be generated from the Hydropower
Resources is of Commercial Quantities;
n) "Development Stage" refers to the development, production, or utilization of RE
resources, including the construction and installation of relevant facilities up to the
operation thereof;
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o) "Effective Date " refers to the date of the execution of this RE Contract subject to
the payment of the signing fee and the posting of the performance bond covering
the first Contract Year as provided hereunder;
p) "Expatriate Expert" refers to a foreign national engaged by the RE DEVELOPER
and/or its Subcontractor/s involved in the Hydropower Operations, who shall
exercise his technical profession, as allowed under existing laws;
q) "Expiration" refers to either the lapse of the term of this RE Contract as provided in
Section III (Term) hereof or the surrender, abandonment, or waiver of the RE
DEVELOPER of the entire Contract Area to the DEPARTMENT;
r) "Filipino Employee" refers to any citizen of the Republic of the Philippines
employed and/or engaged by the RE DEVELOPER and/or its Subcontractor/s involved
in the Hydropower Operations under this RE Contract and such engagement is
characterized as establishing an employer-employee relationship between such
citizen and RE DEVELOPER;
s) "Force Majeure" refers to extraordinary events not foreseeable or avoidable,
events that could not be foreseen, or which, though foreseen, are inevitable;
t) "Generation Facility" refers to a facility for the production of electricity;
u) "Government Share" refers to the amount due the national government and LGUs
from the exploration, development and utilization of the Hydropower Resources
computed in accordance with the Act and its Implementing Rules and Regulations
(IRR), and described in Section XI (Government Share) hereof;
v) "Gross Income" refers to income derived from the RE DEVELOPER's Hydropower
Operations equivalent to the gross sales of Hydropower less sales returns, discounts
and allowance, and Cost of Goods Sold, which is more particularly described in the
Accounting Procedures attached as Annex "B" hereof;
w) "Host LGU" refers to the LGU where the Hydropower Resources and/or Generation
Facility is located;
x) "Hydroelectric Power" or "Hydropower" shall be the energy produced from
generators driven by turbines that convert the potential energy of falling or fast-
flowing water into mechanical energy;
y) "Hydropower Operations" shall include Hydropower exploration, development,
production, and utilization, including the construction, installation, operation and
maintenance of Hydropower Systems to convert Hydropower to electrical power and
the transmission of such electrical power and/or other non-electrical uses;
z) "Hydropower Resources" refer to the water resources found within the Contract
Area to be technically feasible for the development of Hydropower projects, which
include rivers, lakes, waterfalls, irrigation canals, springs, ponds, and other water
bodies;
aa) "Hydropower Systems" refer to the machines or other related equipment that
convert Hydropower into useful electrical or mechanical energy; includes, but is not
limited to, Hydro Turbine Generators (HTGs), electrical connection and transmission
grids, overhead and underground electrical transmission and communications lines,
electric transformers and conditioning equipment, energy storage facilities,
telecommunications equipment, power generation facilities to be operated in
conjunction with HTG installations, climatological and measurement equipment,
control facilities, maintenance yards, access facilities, intake, spillways, dams, and
related facilities and equipment deemed by the RE DEVELOPER to be necessary or
convenient for the production and delivery of electricity from Hydropower;
bb) "Local Government Unit/LGU" refers to the territorial and political subdivisions
of the State which organization and function are fully described under the Local
Government Code of 1991;
cc) "New Investment" refers to investments relating to discovery, exploration,
development and/or utilization of new RE resources or the development of new
Generation Facilities within the Contract Area distinct from the originally registered
operations having separate books of accounts;
dd) "Pre-Development Stage" refers to the preliminary assessment and feasibility
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study up to the financial closing of the Project and specifically covers the term
provided in Section 3.1 of this RE Contract;
ee) "Production Area" refers to that portion of the Contract Area designated by the
RE DEVELOPER where Hydropower Resources are utilized to produce electricity in
Commercial Quantities;
ff) "Project" refers to the RE DEVELOPER's Hydropower Systems within the Contract
Area, which may be implemented in one or more phases; CTHaSD
6.6 During the implementation of the Project, the RE DEVELOPER shall submit for
evaluation and approval by the DEPARTMENT, a request for any revisions to the Work Program
upon determination of such revision. The DEPARTMENT shall act on the request for revision and
thereafter, the RE DEVELOPER may proceed to implement the activity without violating the
provisions on the Work Program: Provided, that revision shall not be allowed within the first two
(2) Contract Years. Provided, further, That the RE DEVELOPER shall be allowed to subsequently
revise its Work Program only if it has substantially complied with all its material financial and
technical activities under the Work Program for the immediate preceding Contract Year and such
revision shall be allowed only once per Contract Year.
6.7 In the event of failure of the RE DEVELOPER to comply with its commitments under
the Work Program, the DEPARTMENT shall call the performance bond posted by the RE
DEVELOPER. This is without prejudice to the right of the DEPARTMENT to terminate the RE
Contract.
SECTION VII. RIGHTS AND OBLIGATIONS. —
7.1 The RE DEVELOPER shall have the following rights:
a) To be granted fiscal and non-fiscal incentives and privileges under the Act and its
IRR, and all other existing laws that are not otherwise modified or repealed by the
Act;
b) To receive assistance from the DEPARTMENT:
i. During the Pre-Development Stage, in securing access to lands and other
areas where Hydropower Resources shall be harnessed; and
ii. In endorsing the Project to the other agencies of the National Government,
LGUs, Board of Investments (BOI) and other entities for the acquisition of
permits, licenses and clearances and availment of applicable fiscal and non-
fiscal incentives.
c) Have at all times the right of ingress to and egress from the Contract Area to and
from facilities wherever located;
d) Acquire rights-of-way and similar rights on, over, under, across and through the
Contract Area or properties adjacent to the Contract Area, which constitute or is
reasonably expected to constitute the Contract Area as the RE DEVELOPER may
reasonably deem necessary.
The DEPARTMENT shall, upon request by the RE DEVELOPER as may be reasonable
given the attendant circumstances, assist the RE DEVELOPER in securing such
rights. For such purpose, the DEPARTMENT shall and does hereby appoint the RE
DEVELOPER as its attorney-in-fact and does hereby give and grant to the RE
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DEVELOPER full authority to act for and on its behalf in the negotiation and
conclusion of agreements and payments for such rights. All obligations, payments
and expenses arising from or incidental to the acquisition of such rights shall be for
the account of the RE DEVELOPER so as to enable the RE DEVELOPER to have
ingress into and egress from the Contract Area and to perform all Hydropower
Operations in accordance with this RE Contract and in consideration of which,
entitlement to such rights shall be held in trust in favor of the RE DEVELOPER.
The DEPARTMENT undertakes to provide further assistance to the RE DEVELOPER,
including the exercise of the power of eminent domain if necessary, to secure such
necessary or proper rights at such cost for the account of the RE DEVELOPER, if the
RE DEVELOPER is unable to secure such rights at commercially reasonable costs
through negotiations or if the same is the most expedient course of action to support
the timely execution of Hydropower Operations;
e) Allow, in accordance with the existing laws, to engage the services of Expatriate
Experts who shall exercise their technical professions solely for the Hydropower
Operations: Provided, That, Filipino Employees shall be given preference to positions
for which they have adequate training and experience required by the RE
DEVELOPER: and Provided, further, That if the employment or connection of such
Expatriate Expert with the RE DEVELOPER ceases, applicable laws and regulations
shall apply to him and his immediate family;
f) Have a free and unimpeded use of Hydropower Resources within the Contract Area
in view of the Hydropower Operations, Additional Investments and New Investments
in regard of which, the DEPARTMENT shall ensure that rights, privileges and other
authorizations it may grant to third parties will not defeat or impair such use; and
g) Be informed by the DEPARTMENT, if at any time the latter becomes aware of any
intended exploration, extraction or use of energy resources other than Hydropower
Resources on the Contract Area, within thirty (30) days from the date it becomes
aware of such intended exploration, extraction or other use.
7.2 The RE DEVELOPER shall have the following obligations:
a) During the Pre-Development Stage, upon determination of Hydropower Resource of
Commercial Quantities, the RE DEVELOPER shall submit to the DEPARTMENT its
Declaration of Commerciality
b) Secure and be subject to any necessary permits, licenses, endorsements,
agreements and clearances from all relevant government and private entities for the
Project;
c) Perform exploration, assessment, field verification, harnessing, piloting and other
activities in accordance with the Work Program and provide technology and
financing in connection with the Pre-Development Stage;
d) Perform the required Hydropower Operations and provide services, technology and
financing in connection therewith;
e) Maintain complete and accurate accounting, financial and technical records of its
Hydropower Operations, subject to Sections X (Data and Reports) and XII
(Confidentiality), and in accordance with the Accounting Procedures as provided
under Annex "B" hereof;
f) Allow officials and representatives authorized by the DEPARTMENT access to the
Contract Area, and to the accounts, books and records directly relating to the
Hydropower Operations during reasonable hours and without causing disruption. The
RE DEVELOPER shall provide such reasonable facilities and assistance as may be
practicable to ensure the success of the inspection;SDHacT
b) Third parties, subsidiaries and Affiliates that provide services for the Hydropower
Operations, including Subcontractors and other service contractors;
c) Prospective assignee/s to whom rights and obligations under this RE Contract are
intended to be assigned;
d) Prospective investor/s or entities with whom the RE DEVELOPER intends to enter
into joint venture or other similar agreements for the Project;
e) Governments and stock/commodity exchanges in accordance with the laws,
regulations, or rules of the relevant country or stock/commodity exchange; and
f) Government authorities, entities and judicial courts if required by law, regulation,
directive, or order, to disclose.
12.6 The information shall be revealed to those persons allowed under this RE Contract
only if and to the extent necessary and desirable for the purpose intended. Each Party shall
ensure that each such person to whom information is disclosed is informed of the confidential
nature of the information and the purpose for which it may be used and that each such person is
bound by this Section.
12.7 The RE DEVELOPER and its Affiliates or the DEPARTMENT, its officers, employees,
consultants and other duly authorized representatives shall not make any public statement or
announcement of any information produced, generated or acquired in the course of the
Hydropower Operations, without prior written consent of the other Party.
SECTION XIII. PERFORMANCE BOND AND SIGNING FEE. —
13.1 The RE DEVELOPER shall pay the signing fee in the amount of ______________
Pesos (PhP___________) and post the performance bond covering the first Contract Year within
fifteen (15) and thirty (30) days, respectively, from its receipt of notice.
13.2 Failure of the RE DEVELOPER to comply with Section 13.1 hereof shall render the
COR and RE Contract to be void ab initio .
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13.3 The initial amount of the bond or other guarantee as specified in Sub-section 7.2
(h) shall not be less than the annual financial commitment/budgetary estimate for the first
Contract Year based on the Work Program.
13.4 The amount of performance bond or other guarantee may be adjusted, subject to
the following conditions:
a) In the event of surrender by the RE DEVELOPER of a portion of the Contract Area
covered by this RE Contract, the performance bond or other guarantee shall be
reduced proportionately in accordance with the Work Program;
b) In the event that the RE DEVELOPER has fully expended its budgetary estimate
under the Work Program but has not fully performed its work obligations, the
amount of bond or other guarantee shall be equal to the succeeding Contract Year's
budgetary estimate under the revised Work Program; and
c) Such other conditions or circumstances as would reasonably warrant the
modification of the amount of the performance bond or other guarantee.
13.5 If the RE DEVELOPER, through its own fault, fails to observe or perform its work
obligations under the Work Program, the DEPARTMENT, upon prior written notice, may proceed
against the performance bond or other guarantee: Provided, That should the work obligations
under the Work Program be fulfilled, and through the efficiency of the RE DEVELOPER, the
corresponding actual expenditures thereon are lower than the estimated expenditures stated in
the Work Program, the same shall be considered as full compliance of the work obligations.
13.6 The DEPARTMENT shall release the performance bond or other guarantee not
later than twenty (20) working days from the date of confirmation by the DEPARTMENT on the
start of the construction of the Generation Facility.
(Note: The amount of signing fee/bonus shall be based on the proposed
installed capacity of the Hydropower Project at the rate of PhP5.00/kW.)
SECTION XIV. SUSPENSION AND TERMINATION. —
14.1 In case of the Pre-Development Stage, the DEPARTMENT shall have the power to
terminate this RE Contract after due notice to the RE DEVELOPER on any of the following
grounds:
a) Non-compliance with the Work Program and the material terms and conditions of
this RE Contract;
b) Non-compliance with the RE technical design standards adopted by the
DEPARTMENT;
c) Tampering, falsifying or plagiarizing of technical design and feasibility study reports;
d) Non-payment of the financial obligations agreed upon under this RE Contract; and
e) Non-posting of performance bond or other guarantee within the period/s provided
under Section XIII (Performance Bond).
14.2 In case of the Development Stage, the DEPARTMENT shall have the power to
terminate this RE Contract after due notice to the RE DEVELOPER on any of the following
grounds:
a) Non-compliance with the approved Work Program and the material terms and
conditions of this RE Contract;
b) Violation of the Renewable Portfolio Standards Rules, as defined in the Act and its
IRR, and relevant Department Circulars;
c) Non-compliance with the RE technical design standards adopted by the
DEPARTMENT;
d) Tampering, falsifying or plagiarizing of technical design, feasibility study generation
and operation reports; SETAcC
15.4 If the dispute cannot be settled within sixty (60) days by mutual discussions as
contemplated in Section 15.1 hereof, and referral to an expert is neither prescribed nor elected
by the Parties with respect to any technical dispute upon written demand of either Party, the
dispute shall finally be settled by an arbitral tribunal (the "Tribunal") governed by and conducted
in accordance with the ICC Rules of Arbitration (the "Rules") in force as of Effective Date (or such
Rules as may be in force at the time such arbitration is commenced), as follows:
a) The RE DEVELOPER will nominate one (1) arbitrator and the DEPARTMENT will
nominate one (1) arbitrator within thirty (30) days from the date of a request by
either Party to initiate arbitration. The two Party-nominated arbitrators will then
jointly nominate a third arbitrator within thirty (30) days from the date of the
appointment of the second arbitrator, to act as Chairman of the Tribunal. Arbitrators
not nominated within the time limits set forth in the preceding sentence shall be
appointed by the ICC Court of International Arbitration;
b) Unless otherwise agreed by the Parties, the venue of the arbitration shall be in
Metro Manila, Philippines;
c) The language of the arbitration and award shall be in English;
d) The Tribunal shall not be authorized to impose, and either Party shall not be
authorized to seek from any judicial authority, any requirement that the Party posts
security for the costs of either Party; and
e) The decision of the Tribunal shall be final and binding upon the Parties. Judgment
upon the award rendered may be entered into any court having jurisdiction, or
application may be made to such court for a judicial acceptance of the award and an
order of enforcement, as the case may be.
15.5 The right to arbitrate disputes under this RE Contract shall survive the Expiration
or Termination of this RE Contract.
SECTION XVI. EMPLOYMENT, TRAINING AND DEVELOPMENT PROGRAMS. —
16.1 The RE DEVELOPER agrees to give preference in employment to qualified Filipino
Employees who are residents of Host LGUs and will undertake the development and training of
Filipino Employees for labor and staff positions, including administrative, technical and
executive management positions. In the course of its operations, the RE DEVELOPER shall
maintain as much as possible, an equal percentage men and women employees and accord
them equal access to development and training programs. In no case shall an employee be
denied employment and access to such development and training programs on the basis of sex
and/or gender.
16.2 During the Pre-Development Stage, the RE DEVELOPER shall, upon request of the
DEPARTMENT, provide development assistance in kind in the amount of ___________ Pesos
(PhP___________). Upon confirmation of the Declaration of Commerciality, the RE DEVELOPER
shall, upon request of the DEPARTMENT, provide development assistance in kind in the amount
of Pesos (PhP___________).
16.3 During the Pre-Development Stage, the RE DEVELOPER shall provide assistance
for training programs, conferences, seminars and other similar activities for the DEPARTMENT's
personnel in the amount of ___________ Pesos (PhP___________) per Contract Year. Upon
confirmation of the Declaration of Commerciality, the RE DEVELOPER shall, upon request of the
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DEPARTMENT, provide assistance for training programs, conference seminars and other similar
activities for the DEPARTMENT's personnel in the amount of ___________ Pesos (PhP___________)
per Contract Year. This assistance shall be accumulated for the succeeding Contract Years if not
availed of in a given Contract Year. The RE DEVELOPER shall pay the unutilized amount of the
training commitment prior to the Expiration or Termination of this RE Contract.
16.4 The RE DEVELOPER shall undertake corporate social responsibility projects in
Host LGUs focused on education and training of qualified and deserving beneficiaries, as
determined by the RE DEVELOPER.
(Note: The funds for training program and development assistance shall be
computed based on the proposed installed capacity of the Hydropower Project at the
rate of PhP5.00/kW. Projects with installed capacity of 1MW and below shall be
exempt from these financial obligations.)
SECTION XVII. MISCELLANEOUS PROVISIONS. —
17.1 NOTICES
Any notice required or given by either Party to the other Party shall be (i) in writing and
delivered personally or sent by registered or certified mail, commercial courier service to the
address designated in writing, (ii) by facsimile to the number most recently provided to such
party or such other address or fax number designated in writing by such party and (iii) by
electronic mail, to the electronic mail address designated in writing by such party or such other
electronic mail address as may be later designated in writing by such party.
Any notice or other communication so transmitted shall be deemed to have been given:
(a) on the day of delivery if delivered personally; (b) one (1) business day after delivery to a
commercial courier service; (c) five (5) days after mailing if sent by registered mail, return
receipt requested, postage prepaid; or (d) when sent by electronic mail or facsimile, using the
email address and facsimile number herein below provided if sent during normal business hours
of the recipient, and if not so confirmed, then on the next business day. All such notices shall be
addressed: aHECST
To the DEPARTMENT:
The Secretary
Department of Energy
Office Address
Email Address
Telephone/Fax Numbers
To the RE DEVELOPER:
Designation
Company Name
Office Address
Email Address
Telephone/Fax Numbers
Any Party may substitute or change such address with prior written notice thereof to the
other Party.
17.2 GOVERNING LAW
The laws of the Republic of the Philippines shall apply to this RE Contract.
17.3 ASSIGNMENT
a) The RE DEVELOPER may assign this RE Contract to a third party subject to the prior
written approval of the DEPARTMENT. This RE Contract shall not be assigned to any
third party, unless such third party is qualified in accordance with the Act and its
IRR.
b) The RE DEVELOPER may assign or transfer part or all of its rights and/or obligations
under this RE Contract to its Affiliate upon compliance with the following provisions:
i. The RE DEVELOPER shall submit to the DEPARTMENT copies of the written
document which unequivocally shows the agreement of the parties thereat to
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the assignment of the RE Contract; and
ii. In the case of a partial assignment, the RE Developer shall guarantee in
writing to the Department the performance of the assigned obligations.
c) The RE DEVELOPER may authorize its subsidiaries, branches or regional corporations
to implement this RE Contract, but the RE DEVELOPER shall remain responsible for
the performance of this RE Contract.
d) During the Pre-Development Stage, this RE Contract shall not be assigned except
where the assignee is a subsidiary, branch or regional corporation of the RE
DEVELOPER created for the special purpose of handling the project covered by the
RE Contract.
e) No assignment shall be granted if the RE DEVELOPER is in default of its Work
Program or any of its material obligations under the RE Contract and other RE
agreements with the DEPARTMENT.
f) An assignment of the RE Contract, whether full or partial, to a non-Affiliate, may be
allowed only once during the entire period covering the Pre-Development Stage and
pre-commissioning phase of the RE Contract. An assignment shall not be allowed to
a non-Affiliate during the first two (2) years of the RE Contract from its effectivity.
17.4 AMENDMENTS
The RE Contract shall not be amended or modified in any respect except by the mutual
consent in writing of the Parties.
17.5 BOOKS OF ACCOUNTS AND AUDITS
a) The RE DEVELOPER shall be responsible for keeping complete books and accounts,
in Philippine currency denominations, reflecting all transactions in connection with
this RE Contract in accordance with the Annex "B" hereof.
b) The DEPARTMENT shall have the right to inspect the RE DEVELOPER's books and
accounts directly relating to this RE Contract for any Calendar or Fiscal Year thirty-
six (36) months following the end of each Calendar or Fiscal Year. Any such audit
shall be completed within twenty-four (24) months from its commencement. Any
exceptions must be made to the RE DEVELOPER in writing within ninety (90)
calendar days following the completion of such audit. If the DEPARTMENT fails to
give such written exception within such time, then the RE DEVELOPER's books of
accounts and statements for such Calendar or Fiscal Year shall be established as
correct and final for all purpose.
c) The DEPARTMENT, upon at least fifteen (15) days advance written notice to the RE
DEVELOPER, is entitled to access, during reasonable hours without affecting
Hydropower Operations, all books of accounts and records and may inspect such
sites and facilities as necessary.
d) If the DEPARTMENT notifies the RE DEVELOPER of an exception to the RE
DEVELOPER's books of accounts within the period specified in Sub-section 17.6 (b),
the RE DEVELOPER shall within ninety (90) days from receipt of written exception
from the DEPARTMENT, question its validity, otherwise, the same shall become final
and binding on the RE DEVELOPER. If the Parties are not able to agree on the
exceptions or adjustments after ninety (90) days from the date of receipt of the RE
DEVELOPER's response to the DEPARTMENT's exception report, the Parties shall
resolve the dispute in accordance with Section XV (Disputes and Arbitration) hereof.
17.6 SEPARABILITY CLAUSE
Should any provision of this RE Contract or the application thereof to any situation or
circumstance be declared null and void and/or invalid or unenforceable, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall remain valid and
enforceable to the fullest extent. In the event of such partial invalidity or unenforceability, the
Parties shall seek in good faith to agree on replacing the invalid or unenforceable provisions with
a provision that in effect will most nearly and fairly approximate the effect of the invalid or
unenforceable provision through the issuance of appropriate supplemental contract/s or
agreement/s.
IN WITNESS WHEREOF, the Parties have caused this RE Contract to be executed by their
respective representatives at the place on the date above written. EHACcT
By: By:
___________________________ ___________________________
NAME PRINCIPAL SIGNATORY
Secretary Designation
WITNESSES
___________________________ ___________________________
NAME NAME OF WITNESS
Director IV, REMB Designation
ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES )
CITY OF TAGUIG ) S.S.
Before me, a Notary Public duly authorized in the City of Taguig, this
________________________, personally appeared:
Competent
Date and Place
Name Evidence of
of Issuance
Identity
DOE SECRETARY
known to be the same person described in the foregoing instrument, who acknowledged before
me that his signature on the instrument was voluntarily affixed by him/her for the purposes
stated therein, and who declared to me that he/she executed the instrument as his/her free and
voluntary act and deed as well as the free and voluntary act and deed of the government agency
herein represented.
This RE Contract consisting of twenty-five (25) pages, including the page on which this
acknowledgment is written, is signed on each and every page thereof by the Parties and their
instrumental witnesses and sealed with my notarial seal.
WITNESS MY HAND AND SEAL on ________________ at ________________.
NOTARY PUBLIC
Doc. No. _________;
Page No. _________;
Book No. _________;
Series of _________.
ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES )
CITY OF TAGUIG ) S.S.
Before me, a Notary Public duly authorized in the City of Taguig, this
________________________, personally appeared:
Competent
Date and Place
Name Evidence of
of Issuance
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Identity
DATE/Place of
FULL NAME ID/ID No.
Issuance
known to be the same person described in the foregoing instrument, who acknowledged before
me that his/her signature on the instrument was voluntarily affixed by him/her for the purposes
stated therein, and who declared to me that he/she executed the instrument as his free and
voluntary act and deed as well as the free and voluntary act and deed of the corporation herein
represented.
This RE Contract consisting of twenty-five (25) pages, including the page on which this
acknowledgment is written, is signed on each and every page thereof by the Parties and their
instrumental witnesses and sealed with my notarial seal.
WITNESS MY HAND AND SEAL on ________________ at ________________.
NOTARY PUBLIC
Doc. No. _________;
Page No. _________;
Book No. _________;
Series of _________.
ANNEX E
Ocean Energy Service Contract
(OESC No. ____-_____-____)
This OCEAN ENERGY SERVICE CONTRACT (this "RE Contract"), made and entered into
this DATE OF EXECUTION in Fort Bonifacio, Taguig City by and between:
The REPUBLIC OF THE PHILIPPINES, hereinafter referred to as "GOVERNMENT,"
through the "Department of Energy," hereinafter referred to as the
"DEPARTMENT," a government agency established pursuant to Republic Act No.
7638, as amended, with principal office address at the Energy Center, Rizal Drive,
Bonifacio Global City, Taguig City, Metro Manila, represented herein by its Secretary,
Name;
-and-
COMPANY NAME, hereinafter referred to as the "RE DEVELOPER," a corporation
duly organized and existing under the laws of the Republic of the Philippines, with
principal office address at Location, represented herein by its Designation, Name.
Each of the DEPARTMENT and the RE DEVELOPER is referred to as a "Party," and
collectively as the "Parties." In the implementation of this RE Contract, the GOVERNMENT
shall act through and be represented by the DEPARTMENT. EacHCD
WITNESSETH:
WHEREAS, all forces of potential energy in public and/or private lands, within the
Philippine territory, belong to the State and their exploration, development and utilization are
governed by Section 2, Article XII of the 1987 Constitution;
WHEREAS, under Republic Act No. 7638, as amended, otherwise known as the
Department of Energy Act of 1992, the DEPARTMENT shall establish and administer programs
for the exploration, development and utilization of energy resources, including Ocean Power
Resources;
WHEREAS, under Republic Act No. 9513, otherwise known as the Renewable Energy Act
of 2008 (the "Act"), the exclusive right to explore and develop a particular renewable energy
area under the said Act shall be through a Renewable Energy Service Contract;
WHEREAS, pursuant to the Act, the RE DEVELOPER has agreed to enter into this RE
Contract with the DEPARTMENT covering the Contract Area for the Project with the
corresponding rights and obligations stipulated hereof;
WHEREAS, the RE DEVELOPER has been determined by the DEPARTMENT to be legally,
technically, and financially qualified to enter into this RE Contract.
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NOW, THEREFORE, for and in consideration of the terms and conditions set forth herein,
the Parties hereby stipulate and agree as follows:
SECTION I. SCOPE. —
1.1 This RE Contract is entered into, with the services, technology and financing to be
furnished by the RE DEVELOPER for its conduct of Ocean Power Operations, in an economically
viable manner.
1.2 This RE Contract cover the Contract Area only as provided under Section V
(Contract Area) hereof.
1.3 The RE DEVELOPER is hereby appointed and constituted by the DEPARTMENT as
the Party having the exclusive right to explore, develop, and utilize the Ocean Power Resources
within the Contract Area defined hereof.
1.4 The RE DEVELOPER may pursue any Additional Investment or New Investment
within the Contract Area and shall be solely responsible for providing the necessary services,
technology, equipment and financing therefor. In case of New Investment, the Parties shall enter
into a new RE Contract at the option of the RE DEVELOPER, subject to approval of the
DEPARTMENT.
1.5 The RE DEVELOPER shall assume all the technical and financial risks under this RE
Contract without any guarantee from the GOVERNMENT and shall not be entitled to
reimbursement for any expense incurred in connection with this RE Contract.
SECTION II. DEFINITION OF TERMS. —
2.1 The words and terms under this RE Contract, unless otherwise specified in the Act
and its IRR, shall have the meaning in accordance with the following definitions:
a) "Abandonment and Termination Plan " refers to the plan prepared by the RE
DEVELOPER submitted within three (3) months from Effective Date in the case of
Pre-Development Stage and five (5) years from confirmation of the Declaration of
Commerciality and approved by the Department of Environment and Natural
Resources (DENR) and the DEPARTMENT for the decommissioning, abandonment
and surface restoration or rehabilitation of the Contract Area, and such
abandonment work plan may be amended, supplemented or modified by the Parties
from time to time;
b) "Accounting Procedures" refers to the set of procedures, guidelines, and
arrangement between the Parties, and any amendments thereto, to govern the
applicable treatment of expenses, costs, and income, set forth in Annex "B", which
forms an integral part of this RE Contract;
c) "Additional Investment" refers to investments relating to improvements,
modernization, rehabilitation, or expansion duly registered with the DEPARTMENT,
subject to the conditions to be determined by the DEPARTMENT, such as but not
limited to the following:
i. Identification of and investment in sequential phases/stages of production, or
undertaking scheduled modernization and/or rehabilitation of the Ocean Power
Systems; and
ii. Improvements to the Ocean Power Systems such as reduced
production/operational costs, increased production, improved operational
efficiency, and better reliability of the Project;
d) "Affiliate" refers to any person or group of persons, directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common control
with, the RE DEVELOPER. As used herein, "control" shall mean the power to direct, or
cause the direction of, the management policies of a person by contract, agency, or
otherwise;
e) "Certificate of Confirmation of Commerciality " or "COCOC" shall refer to the
Certificate duly signed by the DOE Secretary confirming the Declaration of
Commerciality by the RE Developer and shall serve as a notice to proceed for the
construction of the RE Project or the installation of the RE Facilities. The date of
issuance of the COCOC shall be considered as the commencement date of the
Development Stage of the RE Project;
f) "Certificate of Registration" refers to that certification issued to the RE
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DEVELOPER upon the Effective Date of this RE Contract and upon approval of New
Investment, to serve as the basis for its entitlement to the incentives provided under
the Act;
g) "Commercial Operation" shall refer to the phase commencing at the operation of
the RE Project, following the successful testing and commissioning of the RE Project,
and confirming its readiness to inject power into the grid to sell or supply its
produced energy, as duly confirmed by the DEPARTMENT and other relevant
regulatory bodies;
h) "Commercial Quantities" refers to quantities of electricity to be generated from
the Ocean Power Resources, providing, or capable of providing, revenue from sales
of electricity that exceed or would exceed the RE DEVELOPER's Cost of Goods Sold
by a margin sufficient to cause a reasonably prudent person employing standard
industry practices as to Ocean Power resources and using commercially available
technology to develop the Ocean Power Systems; cIECaS
i) "Contract Area" refers to an area where the RE DEVELOPER is given the exclusive
right to explore and develop RE resources and which is more particularly described
in a map with its technical description attached herein as Annex "A" and made an
integral part of this RE Contract;
j) "Contract Year " refers to a period of twelve (12) consecutive calendar months
counted from the Effective Date of this RE Contract and thereafter, from the
anniversary of such Effective Date;
k) "Corporate Income Tax" refers to the tax imposed upon net taxable income under
the National Internal Revenue Code (NIRC) of 1997, as amended by Republic Act No.
9937 and the Act. Upon lapse of the period of the Income Tax Holiday (ITH) under
the Act, the RE DEVELOPER shall be subject to a Corporate Income Tax rate of ten
percent (10%);
l) "Cost of Goods Sold" refers to all business expenses directly incurred in the
exploration, development, and utilization of the Ocean Power Resources in order to
produce and sell electricity and transmit the same to its intended location and use,
which expenses are particularly described in Annex "B" hereof;
m) "Declaration of Commerciality" refers to a written declaration by the RE
DEVELOPER stating that the electricity to be generated from the Ocean Power
Resources is of Commercial Quantities;
n) "Development Stage" refers to the development, production, or utilization of RE
resources, including the construction and installation of relevant facilities up to the
operation phase thereof;
o) "Effective Date " refers to the date of the execution of this RE Contract subject to
the payment of the signing fee and the posting of the performance bond covering
the first Contract Year as provided hereunder;
p) "Expatriate Expert" refers to a foreign national engaged by the RE DEVELOPER
and/or its Subcontractor/s involved in the Ocean Power Operations, who shall
exercise his technical profession, as allowed under existing laws;
q) "Expiration" refers to either the lapse of the term of this RE Contract provided in
Section III (Term) hereof or the surrender, abandonment or waiver of the RE
DEVELOPER of the entire Contract Area to the DEPARTMENT;
r) "Filipino Employee" refers to any citizen of the Republic of the Philippines
employed and/or engaged by the RE DEVELOPER and/or its Subcontractor/s involved
in the Ocean Power Operations under this RE Contract, and such engagement is
characterized as establishing an employer-employee relationship between such
citizen and RE DEVELOPER;
s) "Force Majeure" refers to extraordinary events not foreseeable or avoidable,
events that could not be foreseen, or which, though foreseen, are inevitable;
t) "Generation Facility" refers to a facility for the production of electricity;
u) "Government Share" refers to the amount due the national government and LGUs
from the exploration, development and utilization of the Ocean Power Resources
computed in accordance with the Act and its Implementing Rules and Regulations
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(IRR), and described in Section XI (Government Share) hereof;
v) "Gross Income" refers to income derived from the RE DEVELOPER's Ocean Power
Operations equivalent to the gross sales of Ocean Power less sales returns,
discounts and allowance, and Cost of Goods Sold, which is more particularly
described in the Accounting Procedures attached as Annex "B";
w) "Host LGU" refers to the LGU where the Ocean Power Resources and/or Generation
Facility is located;
x) "Local Government Units/LGU" refers to the territorial and political subdivisions
of the State which organization and function are fully described under the Local
Government Code of 1991;
y) "New Investment" refers to investments relating to discovery, exploration,
development and/or utilization of new RE resources or the development of new
Generation Facilities within the Contract Area distinct from the originally registered
operations having separate books of accounts;
z) "Ocean Power" refers to the energy that can be derived from Ocean Power
Resources that is converted into useful electrical or mechanical energy;
aa) "Ocean Power Operations" shall include Ocean Power exploration, development,
production, and utilization, including the construction, installation, operation and
maintenance of Ocean Power Systems to convert Ocean Power to electrical power
and the transmission of such electrical power and/or other non-electrical uses;
bb) "Ocean Power Resources" refers to the water resources found with the Contract
Area to be technically feasible for the development of Ocean Power projects;
cc) "Ocean Power Systems" refers to the machines or other related equipment that
convert Ocean Power into useful electrical or mechanical energy; includes, but is not
limited to, Water Turbine Generators (WTGs), electrical collection and transmission
grids, overhead and underground electrical transmission and communications lines,
electric transformers and conditioning equipment, energy storage facilities,
telecommunications equipment, power generation facilities to be operated in
conjunction with WTG installations, meteorological towers and water current
measurement equipment, control buildings, maintenance yards, access facilities,
and related facilities and equipment deemed by the RE DEVELOPER to be necessary
or convenient for the production and delivery of electricity from Ocean Power;
dd) "Pre-Development Stage" refers to the preliminary assessment and feasibility
study up to the financial closing of the Project and specifically covers the term
provided in Section 3.1 of this RE Contract;SAHITC
ee) "Production Area" refers to that portion of the Contract Area designated by the
RE DEVELOPER where Ocean Power Resources are utilized to produce electricity in
Commercial Quantities;
ff) "Project" refers to the RE DEVELOPER's Ocean Power Systems within the Contract
Area, which may be implemented in one or more phases;
gg) "RE Contract" refers to this Ocean Power Service Contract, as may be amended or
extended by the Parties and shall have the same meaning as provided under the
Act;
hh) "Sub-contractor" refers to any person or entity contracted by the RE DEVELOPER
to provide goods or services for the purpose of this RE Contract, subject to the
provisions of existing laws;
ii) "Termination" refers to the right of the Parties to cancel this RE Contract pursuant
to Section XIV (Suspension and Termination) hereof; and
jj) "Work Program" refers to all types of plans and programs and related activities
formulated for the performance of the work obligations by the RE DEVELOPER during
the Pre-Development Stage, along with the corresponding budgetary estimate,
submitted to the DEPARTMENT under this RE Contract as Annex "C" and shall
thereafter updated on a regular basis.
SECTION III. TERM. —
3.1 Pre-Development Stage. The Pre-Development Stage of this RE Contract shall be
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a non-extendible period of seven (7) years from the Effective Date: Provided, That the RE
DEVELOPER shall submit a Declaration of Commerciality within the Pre-Development Stage,
otherwise, the term of this RE Contract shall automatically expire.
3.2 Development Stage. Upon submission of the Declaration of Commerciality, as
confirmed by the DEPARTMENT through the issuance of a Certificate of Confirmation of
Commerciality, this RE CONTRACT shall remain in force for the balance of a period of twenty-five
(25) years from the Effective Date: Provided, That at the option of the RE DEVELOPER, by written
notice to the DEPARTMENT not later than one (1) year prior to the expiration of the initial
twenty-five (25)-year period and so long as the RE DEVELOPER is not in default of any material
obligations under this RE Contract, the DEPARTMENT may approve the extension of this RE
Contract for another twenty-five (25) years, subject to the terms and conditions to be mutually
agreed upon by the Parties.
SECTION IV. CONTRACT STAGE TRANSITION. —
4.1 Declaration of Commerciality. — Upon its determination that the Ocean Energy
Resource can generate power in Commercial Quantities, the RE DEVELOPER shall submit the
Declaration of Commerciality along with supporting documents which shall be made within the
Pre-Development stage.
4.2 Certificate of Confirmation of Commerciality . — The DEPARTMENT shall act
on RE DEVELOPER's Declaration of Commerciality within twenty (20) working days from receipt
thereof provided the submission is made within the Pre-Development Stage as provided in
Section 4.1. Within the 20-working day period, the DEPARTMENT shall either: a) issue the
Certificate of Confirmation of Commerciality or b) deny the Declaration of Commerciality.
4.3 Should the DEPARTMENT find the Declaration of Commerciality without sufficient
basis, the RE DEVELOPER shall be given a one-time chance of thirty (30) calendar days from
receipt of the result of evaluation to rectify its submission. Otherwise, the request of issuance of
Certificate of Confirmation of Commerciality shall be denied.
SECTION V. CONTRACT AREA. —
5.1 The Contract Area refers to the area as described in Annex "A" hereof reserved by
the DEPARTMENT for the RE DEVELOPER over which the RE DEVELOPER has exclusive right to
explore, develop and utilize the Ocean Power Resources in accordance with this RE Contract.
The RE DEVELOPER may, upon submission of written notice to the DEPARTMENT,
surrender or waive the entire Contract Area or any portion thereof without prejudice to any other
outstanding liability or costs. In case the RE DEVELOPER completely ceases its operations, the
provisions under its Abandonment and Termination Plan shall apply consistent with its
Environmental Compliance Certificate (ECC).
5.2. During Pre-Development Stage, the RE DEVELOPER shall delineate its Production
Area which shall be the final Contract Area during the Development Stage of the Project and
shall form part of its Declaration of Commerciality.
5.3. Any areas outside the proposed Production Area shall be deemed surrendered or
waived on the date of Declaration of Commerciality.
SECTION VI. WORK PROGRAM. —
6.1 The RE DEVELOPER shall carry out its existing work according to good industry
practices.
6.2 During the Pre-Development Stage, the RE DEVELOPER shall conduct preliminary
Ocean Power Resources data gathering activities and, if warranted by the results of such Ocean
Power Resources data gathering, conduct a full Ocean Power Resources assessment.
6.3 Attached to this RE Contract is a Work Program, details of which are particularly
described in Annex "C" hereof.
6.4 The RE DEVELOPER shall submit to the DEPARTMENT a Work Program for the first
five (5) years which shall form part of its Declaration of Commerciality and its corresponding
budget thereof. TAcSaC
6.5 Not later than two (2) months prior to the end of the first five (5) years from the RE
DEVELOPER's Declaration of Commerciality, the RE DEVELOPER shall submit a Work Program for
the next five (5) years and shall do so every five (5) years thereafter. The Work Program or any
revisions thereof shall require the approval of the DEPARTMENT.
e) Maintain complete and accurate accounting, financial and technical records of its
Ocean Power Operations, subject to Sections IX (Technical Data and Reports
Submission) and XI (Confidentiality), and in accordance with the Accounting
Procedures;
f) Allow officials and representatives authorized by the DEPARTMENT access to the
Contract Area and to accounts, books and records directly relating to the Ocean
Power Operations during reasonable hours and without causing disruption. The RE
DEVELOPER shall provide such reasonable facilities and assistance as may be
practicable to ensure the success of the inspection;
g) Give priority in employment to qualified personnel in the Host LGU subject to
Section XV (Employment, Training and Development Programs);
h) At the start of every Contract Year, post a performance bond or any other guarantee
of sufficient amount but not less than the annual budgetary estimate for the
corresponding Contract Year in favor of the DEPARTMENT from a list of
DEPARTMENT-accredited insurance or surety companies. The posting of performance
bond shall be conditioned upon the faithful performance by the RE DEVELOPER of
any or all of the commitments and obligations under the Work Program until the
commencement of the construction of the Generation Facility.
Upon the commencement of the construction of the Generation Facility, the RE
DEVELOPER shall notify the DEPARTMENT of such fact and the latter shall verify the
same. Thereafter, the obligation to post the bond shall cease;
i) Be subject to the provisions of laws of general application;
j) Develop, operate, and maintain the Contract Area in accordance with accepted
industry practices to enable maximum economic production of the Ocean Power
Resources;
k) Be responsible for procurement of installation, equipment and supplies, and for
entering into subcontracts related to the Ocean Power Operations;
l) Comply with the provisions of Department Circular No. DC2012-11-0009 entitled
"Renewable Energy Safety, Health and Environment Rules and Regulations," as may
be amended, and in so doing, (1) exert its best efforts to prevent pollution and
damage to the atmosphere, oceans, rivers, lakes, harbors and land; and (2) ensure
the safety and health of its operating personnel;
m) Give preference to Philippine companies/agencies entering into subcontracts on
goods or services that are required in the Ocean Power Operations but are not
carried out by the RE DEVELOPER: Provided, That the goods or services are
competitive as to cost, quality and availability;
n) Be responsible in the proper handling of data, samples, information, reports, and
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other documents;
o) Maintain all meters and measuring equipment in good order and allow access to
these as well as to the exploration sites to inspectors authorized by the
DEPARTMENT;
p) Pay the Government Share in accordance with the computation in the Act's IRR and
taxes as may be applicable;
q) Organize Information, Education and Communication (IEC) Campaign on benefits to
the Host LGUs; and
r) Comply with all rules, regulations, and guidelines issued by the DEPARTMENT and
other government agencies that are applicable hereto.
7.3 Upon the Effective Date of this RE Contract or upon the approval of the RE
DEVELOPER's New Investment, the DEPARTMENT shall issue a Certificate of Registration to the
RE DEVELOPER, to enable it to avail of the fiscal and non-fiscal incentives and privileges as
stated under the Act and its IRR. The registration shall be valid and effective for the entire term
and effectivity of this RE Contract.
SECTION VIII. REPRESENTATIONS AND WARRANTIES. —
Acknowledging that the GOVERNMENT, through the DEPARTMENT, has entered into this RE
Contract in reliance upon the representations and warranties in this Section, the RE DEVELOPER
represents and warrants as follows:
8.1 It is a corporation or entity duly formed, established, validly existing and in good
standing under the laws of the Philippines with full power to own its property; to carry on its
business as it is now being conducted; and to execute, deliver and perform its obligations under
this RE Contract, and the entering into and performance of this RE Contract by the RE
DEVELOPER does not conflict with the articles of incorporation, by-laws and other constitutive
documents of the RE DEVELOPER and has been duly authorized by all necessary corporate and
legal action on the part of the RE DEVELOPER;
8.2 The individual signing this RE Contract on behalf of the RE DEVELOPER is duly
authorized to sign as of the Effective Date;
8.3 There is no litigation, arbitration, or administrative proceeding pending or, to the
best knowledge of the RE DEVELOPER, threatened against the RE DEVELOPER or its properties
the adverse determination of which would adversely affect the ability of the RE DEVELOPER to
perform or comply with any of its material obligations under this RE Contract;
8.4 The RE DEVELOPER:
a) Has not been declared in default in respect of any of its material financial
commitments or obligations based on their reports duly validated by the
DEPARTMENT;
b) Is not otherwise in default of any kind in respect of any financial commitment or
obligation or in respect of any agreement, undertaking or instrument to which it is a
party by which it or any of its assets or properties may be bound; and
c) Is not aware of a fact that by the service of notice and/or lapse of time would
constitute a default in sub-paragraphs (a) to (b) above.
CIETDc
12.4 Upon the Expiration or Termination of this RE Contract, the DEPARTMENT may
provide third parties with the data and reports submitted by the RE DEVELOPER pursuant to this
Section.
12.5 Contrary stipulations notwithstanding, the RE DEVELOPER may furnish the
information to the following third parties, subsidiaries and Affiliates, such as, but not limited to:
a) Banks or other credit institutions from which finance is sought by the RE
DEVELOPER;
b) Third parties, subsidiaries and Affiliates that provide services for the Ocean Power
Operations, including Subcontractors and other service contractors;
c) Prospective assignee/s to whom rights and obligations under this RE Contract are
intended to be assigned;
d) Prospective investor/s or entities with whom the RE DEVELOPER intends to enter
into joint venture or other similar agreements for the Project;
e) Governments and stock/commodity exchanges in accordance with the laws,
regulations, or rules of the relevant country or stock/commodity exchange; and
f) Government authorities, entities and judicial courts if required by law, regulation,
directive, or order to disclose.
12.6 The information shall be revealed to those persons allowed under this RE Contract
only if and to the extent necessary and desirable for the purpose intended. Each Party shall
ensure that such person to whom information is disclosed is informed of the confidential nature
of the information and the purpose for which it may be used and that each such person is bound
by this Section.
12.7 The RE DEVELOPER and its Affiliates or the DEPARTMENT, its officers, employees,
consultants and other duly authorized representatives shall not make any public statement or
announcement of any information produced, generated, or acquired in the course of the Ocean
Power Operations, without prior written consent of the other Party.
SECTION XIII. PERFORMANCE BOND AND SIGNING FEE. —
13.1 The RE DEVELOPER shall pay the signing fee in the amount of _________ Pesos
(PhP_________) and post the performance bond covering the first Contract Year within fifteen (15)
and thirty (30) days, respectively, from its receipt of notice.
13.2 Failure of the RE DEVELOPER to comply with Section 13.1 hereof shall render the
COR and RE Contract to be void ab initio .
13.3 The initial amount of the bond or other guarantee as specified in Sub-section 7.2
(g) shall not be less than the annual financial commitment/budgetary estimate for the first
Contract Year based on the Work Program.
13.4 The amount of performance bond or other guarantee may be adjusted, subject to
the following conditions:
a) In the event of surrender by the RE DEVELOPER of a portion of the Contract Area
covered by this RE Contract, the performance bond or other guarantee shall be
reduced proportionately in accordance with the Work Program;
b) In the event that the RE DEVELOPER has fully expended its budgetary estimate
under the Work Program or Work Plan but has not fully performed its work
obligations, the amount of bond or other guarantee shall be equal to the succeeding
Contract Year's budgetary estimate under the revised Work Program; and
c) Such other conditions or circumstances as would reasonably warrant the
modification of the amount of the performance bond or other guarantee.
13.5 If the RE DEVELOPER, through its own fault, fails to observe or perform its work
obligations under the Work Program, the DEPARTMENT, upon prior written notice, may proceed
against the performance bond or other guarantee: Provided That, should the work obligations
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under the Work Program be fulfilled, and through the efficiency of the RE DEVELOPER, the
corresponding actual expenditures thereon are lower than the estimated expenditures stated in
the Work Program, the same shall be considered as full compliance of the work obligations.
13.6 The DEPARTMENT shall release the performance bond or other guarantee not
later than twenty (20) working days from the date of confirmation by the DEPARTMENT on the
start of the construction of the Generation Facility.
(Note: The amount for signing fee/bonus shall be based on the total Contract
Area at the rate of PhP100.00/has.)
SECTION XIV. SUSPENSION AND TERMINATION. —
14.1 In case of the Pre-Development Stage, the DEPARTMENT shall have the power to
terminate this RE Contract after due notice to the RE DEVELOPER on any of the following
grounds:
a) Non-compliance with the Work Program and the material terms and conditions of
this RE Contract;
b) Non-compliance with the RE technical design standards adopted by the
DEPARTMENT;
c) Non-observance of environmental regulations imposed by the DENR during the
conduct of feasibility study;
d) Tampering, falsifying or plagiarizing of technical design and feasibility study reports;
e) Non-payment of the financial obligations agreed upon under this RE Contract; and
f) Non-posting of performance bond or other guarantee within the period/s provided
under Section XIII (Performance Bond). cSTHAC
14.2 In case of the Development Stage, the DEPARTMENT shall have the power to
terminate this RE Contract after due notice to the RE DEVELOPER on any of the following
grounds:
a) Non-compliance with the material terms and conditions of this RE Contract;
b) Violation of the Renewable Portfolio Standards Rules, as defined in the Act and
relevant Department Circulars;
c) Non-compliance with the approved Work Plan and any other material obligations
herein;
d) Non-compliance with the RE technical design standards adopted by the
DEPARTMENT;
e) Non-observance of environmental regulations imposed by the DENR during
construction and operation;
f) Tampering, falsifying or plagiarizing of technical design, feasibility study generation
and operation reports;
g) Non-remittance of Government Share as determined by the Compliance Division —
Financial Services of the DEPARTMENT;
h) Non-payment of the financial obligations agreed upon under this RE Contract;
i) Non-posting of performance bond or other guarantee within the period/s provided
under Section XIII (Performance Bond).
j) Failure to comply with material reportorial obligations under this RE Contract; and
k) Any representation or warranty made by the RE DEVELOPER under Section VIII
(Representations and Warranties) which shall prove to have been incorrect in any
material respect when made.
14.3 In case the default of the RE DEVELOPER on account of any of the foregoing
grounds is attributable to Force Majeure, the obligation of the RE DEVELOPER may be suspended
for a period of one (1) year or until the Force Majeure event ceases to exist whichever comes
earlier subject to the following conditions:
a) The RE DEVELOPER shall file a notice of Force Majeure to the DEPARTMENT within
fifteen (15) calendar days from its existence;
b) After due validation which shall be made within twenty (20) working days from
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receipt of such notice, the DEPARTMENT shall issue an approval of suspension of
contractual obligation/s affected by Force Majeure;
c) The RE DEVELOPER shall continue to post the performance bond, if necessary,
observe administrative requirements and comply with reportorial obligations on its
work commitments not affected by Force Majeure;
d) Once the Force Majeure had ceased, the RE DEVELOPER shall notify the
DEPARTMENT within five (5) calendar days from cessation together with the revised
Work Program covering the remaining contract term;
e) Any failure or delay on the part of either Party in the performance of its obligations
or duties hereunder shall be excused to the extent attributable to Force Majeure;
f) If the Geothermal Operations are curtailed or prevented by such causes, then the
time for enjoying the rights and carrying out the obligations thereby affected, and all
rights and obligations hereunder shall be extended for a period equal to the period
of delay, curtailment or prevention: Provided, however, That the suspension of
obligation shall in no way extend the term of the contract. Provided, further, That if
operations are delayed, curtailed or prevented by Force Majeure for a continuous
period of twelve (12) months, this RE Contract may thereafter be terminated, at the
option of the RE DEVELOPER, at anytime that the Force Majeure condition still exists,
subject to confirmation of the DEPARTMENT; and
g) The Party whose ability to perform its obligations is so affected shall notify the other
Party thereof in writing stating the cause and such affected Party shall do all
reasonably within its power to remove such cause.
14.4 Notwithstanding the foregoing, this RE Contract shall be terminated without
prejudice to the RE Developer's obligation which survive the termination of this RE Contract.
SECTION XV. DISPUTES AND ARBITRATION. —
15.1 Any dispute, controversy, or claim arising out of or relating to this RE Contract
except Section 14.1.a hereof, shall be settled amicably within a period of sixty (60) days after
receipt by one Party of a notice from the other Party of the existence of the dispute.
15.2 If the dispute cannot be settled amicably within the sixty (60)-day period, the
Parties shall, with respect to disputes arising out of or in connection with Sections V (Contract
Area), VI (Work Program and Estimated Expenditures), and XI (Government Share) refer the
dispute to an independent expert for resolution in the manner provided below; Provided, That
any Party, in its sole discretion, may require that the dispute be referred to arbitration under
Section 15.4 hereof.
15.3 The following shall govern the rules of referral:
a) After the sixty (60)-day period in Section 15.1 has passed, any Party may give
notice to the other Party of its intention to refer the dispute to an expert in
accordance with the provisions of this RE Contract;
b) The respondent shall, within twenty-one (21) days after receipt of the notice of
intention to refer, serve on the applicant a notice of its intention to defend;
AcSCaI
c) If within fourteen (14) days after the applicant's receipt of the respondent's notice of
intention to defend, the Parties have agreed on an expert and on the terms under
which the dispute shall be referred to the independent expert mentioned in Section
15.2 hereof. In the event that within such fourteen (14)-day period, the Parties are
unable to agree upon an expert to be appointed hereunder or upon the terms of
such expert's reference or both, then either Party may request the International
Chamber of Commerce (ICC) International Centre for Expertise to appoint an expert,
and the matters to be determined by such expert shall be those set out in the notice
of intention to refer and the notice of intention to defend;
d) Unless the Parties agree otherwise, any expert proceedings under this Section shall
be required to follow the ICC Rules for Expertise in force as of Effective Date;
e) The language of the expert proceedings and the expert's determinations shall be in
English;
f) The Parties hereby agree to be bound by, to perform this RE Contract in accordance
with, and to implement, as the case may be, the determination of the expert. Failure
by one Party to so act shall constitute a breach of this RE Contract and shall be
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submitted to arbitration in accordance with Section 15.4 as the sole means of
enforcing the determination; and
g) Each Party shall bear the costs and expenses of all lawyers, advisors, witnesses and
employees retained by it in connection with the expert proceedings: Provided,
however, That in circumstances where the expert determines that a matter referred
to him was not subject to a bona fide dispute, the costs and expenses incurred by
the prevailing Party and the expert in connection with such matter shall be paid by
the non-prevailing Party.
15.4 If the dispute cannot be settled within sixty (60) days by mutual discussions as
contemplated in Section 15.1, and referral to an expert is neither prescribed nor elected by the
Parties with respect to any technical dispute, the dispute shall finally be settled by an arbitral
tribunal (the "Tribunal") governed by and conducted in accordance with the ICC Rules of
Arbitration (the "Rules") in force as of Effective Date (or such Rules as may be in force at the
time such arbitration is commenced), as follows:
a) The RE DEVELOPER will nominate one (1) arbitrator and the DEPARTMENT will
nominate one (1) arbitrator within thirty (30) days from the date of a request by
either Party to initiate arbitration. The two Party-nominated arbitrators will then
jointly nominate a third arbitrator within thirty (30) days of the date of the
appointment of the second arbitrator, to act as Chairman of the Tribunal. Arbitrators
not nominated within the time limits set forth in the preceding sentence shall be
appointed by the ICC Court of International Arbitration;
b) Unless otherwise agreed by the Parties, the venue of the arbitration shall be in
Metro Manila, Philippines;
c) The language of the arbitration and award shall be in English;
d) The Tribunal shall not be authorized to impose, and either Party shall not be
authorized to seek from any judicial authority, any requirement that the other post
security for the costs of either Party;
e) The decision of the Tribunal shall be final and binding upon the Parties. Judgment
upon the award rendered may be entered into any court having jurisdiction, or
application may be made to such court for a judicial acceptance of the award and an
order of enforcement, as the case may be.
15.5 The right to arbitrate disputes under this RE Contract shall survive the Expiration
or Termination of this RE Contract.
SECTION XVI. EMPLOYMENT, TRAINING AND DEVELOPMENT PROGRAMS. —
16.1 The RE DEVELOPER agrees to give preference in employment to qualified Filipino
Employees who are residents of Host LGUs and will undertake the development and training of
Filipino Employees for labor and staff positions, including administrative, technical, and
executive management positions. In the course of its operations, the RE DEVELOPER shall
maintain as much as possible, an equal percentage men and women employees and accord
them equal access to development and training programs. In no case shall an employee be
denied employment and access to such development and training programs on the basis of sex
and/or gender.
16.2 During the Pre-Development Stage, the RE DEVELOPER shall, upon request of the
DEPARTMENT shall provide development assistance in kind in the amount of (PhP____________).
Upon confirmation of the Declaration of Commerciality, the RE DEVELOPER, upon request of the
DEPARTMENT shall provide development assistance in kind in the amount of (PhP____________).
16.3 During the Pre-Development Stage, the RE DEVELOPER shall provide assistance
for training programs, conferences, seminars and other similar activities for the DEPARTMENT's
personnel in the amount of (PhP____________) per Contract Year. Upon confirmation of the
Declaration of Commerciality, the RE DEVELOPER shall, upon request of the DEPARTMENT,
provide assistance for training programs, conference seminars and other similar activities for the
DEPARTMENT's personnel in the amount of (PhP____________) per Contract Year. This assistance
shall be accumulated for the succeeding Contract Years if not availed of in a given Contract
Year. The RE DEVELOPER shall pay the unutilized amount of the training commitment prior to
the Expiration or Termination of this RE Contract.
16.4 The RE DEVELOPER shall undertake corporate social responsibility projects in
Host LGUs with focus on education and training of qualified and deserving beneficiaries, as
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determined by the RE DEVELOPER. SCEHaD
(Note: The funds for training program and development assistance shall be
computed based on the total Contract Area at the rate of PhP100.00/has.)
SECTION XVII. MISCELLANEOUS PROVISIONS. —
17.1 NOTICES
Any notice required or given by either Party to the other Party shall be (i) in writing and
delivered personally or sent by registered or certified mail, commercial courier service to the
address designated in writing, (ii) by facsimile to the number most recently provided to such
party or such other address or fax number designated in writing by such party and (iii) by
electronic mail, to the electronic mail address designated in writing by such party or such other
electronic mail address as may be later designated in writing by such party.
Any notice or other communication so transmitted shall be deemed to have been given:
(a) on the day of delivery if delivered personally; (b) one (1) business day after delivery to a
commercial courier service; (c) five (5) days after mailing if sent by registered mail, return
receipt requested, postage prepaid; or (d) when sent by electronic mail or facsimile, using the
email address and facsimile number herein below provided if sent during normal business hours
of the recipient, and if not so confirmed, then on the next business day. All such notices shall be
addressed:
To the DEPARTMENT:
The Secretary
Department of Energy
Office Address
Email Address
Telephone/Fax Numbers
To the RE DEVELOPER:
Designation
Company Name
Office Address
Email Address
Telephone/Fax Numbers
Any Party may substitute or change such address with prior written notice thereof to the
other Party.
17.2 GOVERNING LAW
The laws of the Republic of the Philippines shall apply to this RE Contract.
17.3 ASSIGNMENT
a) The RE DEVELOPER may assign this RE Contract to a third party subject to the prior
written approval of the DEPARTMENT. This RE Contract shall not be assigned to any
third party, unless such third party is qualified in accordance with the Act and its
IRR.
b) The RE DEVELOPER may assign or transfer part or all of its rights and/or obligations
under this RE Contract to its Affiliate upon compliance with the following provisions:
i. The RE DEVELOPER shall submit to the DEPARTMENT copies of the written
document which unequivocally shows the agreement of the parties thereat to
the assignment of the RE Contract; and
ii. In the case of a partial assignment, the RE Developer shall guarantee in
writing to the Department the performance of the assigned obligations.
c) The RE DEVELOPER may authorize its subsidiaries, branches or regional corporations
to implement this RE Contract, but the RE DEVELOPER shall remain responsible for
the performance of this RE Contract.
d) During the Pre-Development Stage, this RE Contract shall not be assigned except
where the assignee is a subsidiary, branch or regional corporation of the RE
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DEVELOPER created for the special purpose of handling the project covered by the
RE Contract.
e) No assignment shall be granted if the RE DEVELOPER is in default of its Work
Program or any of its material obligations under the RE Contract and other RE
agreements with the DEPARTMENT.
f) An assignment of the RE Contract, whether full or partial, to a non-Affiliate, may be
allowed only once during entire period covering the Pre-Development Stage and pre-
commissioning phase of the RE Contract. An assignment shall not be allowed to a
non-Affiliate during the first two (2) years of the RE Contract from its effectivity.
17.4 AMENDMENTS
The RE Contract shall not be amended or modified in any respect except by the mutual
consent in writing of the Parties in accordance with existing rules and regulations.
17.5 BOOKS OF ACCOUNTS AND AUDITS
a) The RE DEVELOPER shall be responsible for keeping complete books and accounts,
in Philippine currency denominations, reflecting all transactions in connection with
this RE Contract in accordance with the Accounting Procedures.
b) The DEPARTMENT shall have the right to inspect the RE DEVELOPER's books and
accounts directly relating to this RE Contract for any Calendar or Fiscal Year thirty-
six (36) months following the end of each Calendar or Fiscal Year. Any such audit
shall be completed within twenty-four (24) months from its commencement. Any
exceptions must be made to the RE DEVELOPER in writing within ninety (90)
calendar days following the completion of such audit. If the DEPARTMENT fails to
give such written exception within such time, then the RE DEVELOPER's books of
accounts and statements for such Calendar or Fiscal Year shall be established as
correct and final for all purpose.
c) The DEPARTMENT, upon at least fifteen (15) days' advance written notice to the RE
DEVELOPER, is entitled to access, during reasonable hours without affecting Ocean
Power Operations, all books of accounts and records and may inspect such sites and
facilities as necessary.
ACcDEa
By: By:
___________________________ ___________________________
NAME PRINCIPAL SIGNATORY
Secretary Designation
WITNESSES
___________________________ ___________________________
NAME NAME
Director IV, REMB Designation
ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES )
CITY OF TAGUIG ) S.S.
Before me, a Notary Public duly authorized in the City of Manila, this
________________________, personally appeared:
Competent
Name Evidence of Date and Place of
Identity Issuance
DATE/Place of
FULL NAME ID/ID No.
Issuance
known to be the same persons described in the foregoing instrument, who acknowledged before
me that his signature on the instrument was voluntarily affixed by him/her for the purposes
stated therein, and who declared to me that he/she executed the instrument as his/her free and
voluntary act and deed as well as the free and voluntary act and deed of the government agency
herein represented.
This instrument consisting of twenty-six (26) pages, including the page on which the
acknowledgment is written, is signed on each and every page thereof by the Parties and their
instrumental witnesses and sealed with my notarial seal.
WITNESS MY HAND AND SEAL on ________________ at ________________.
NOTARY PUBLIC
Doc. No. _________;
Page No. _________;
Book No. _________;
Series of _________.
ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES )
CITY OF TAGUIG ) S.S.
Before me, a Notary Public duly authorized in the City of Manila, this
________________________, personally appeared:
DATE/Place of
FULL NAME ID/ID No.
Issuance
known to be the same persons described in the foregoing instrument, who acknowledged before
me that his/her signature on the instrument was voluntarily affixed by him/her for the purposes
stated therein, and who declared to me that he/she executed the instrument as his/her free and
voluntary act and deed as well as the free and voluntary act and deed of the corporation herein
represented.
This instrument consisting of twenty-six (26) pages, including the page on which the
acknowledgment is written, is signed on each and every page thereof by the Parties and their
instrumental witnesses and sealed with my notarial seal. EHCcIT
NOTARY PUBLIC
Doc. No. _________;
Page No. _________;
Book No. _________;
Series of _________.
ANNEX F
Wind Energy Service Contract
(WESC No. ________-____-___)
This WIND ENERGY SERVICE CONTRACT (this "RE Contract"), made and entered into
this DATE OF EXECUTION in Bonifacio Global City, Taguig City by and between:
The REPUBLIC OF THE PHILIPPINES, hereinafter referred to as "GOVERNMENT,"
through the "Department of Energy," hereinafter referred to as the
"DEPARTMENT," a government agency established pursuant to Republic Act No.
7638, as amended, with principal office address at the Energy Center, Rizal Drive,
Bonifacio Global City, Taguig City, Metro Manila, represented herein by its Secretary,
Name;
-and-
COMPANY NAME, hereinafter referred to as the "RE DEVELOPER," a corporation
duly organized and existing under the laws of the Republic of the Philippines, with
principal office address at Company Address represented herein by its Designation,
Name.
Each of the DEPARTMENT and the RE DEVELOPER is referred to as a "Party," and
collectively as the "Parties." In the implementation of this RE Contract, the GOVERNMENT
shall act through and be represented by the DEPARTMENT.
WITNESSETH:
WHEREAS, all forces of potential energy in public and/or private lands, within the
Philippine territory, belong to the State and their exploration, development and utilization are
governed by Section 2, Article XII of the 1987 Constitution;
WHEREAS, under Republic Act No. 7638, as amended, otherwise known as the
Department of Energy Act of 1992, the DEPARTMENT shall establish and administer programs
for the exploration, development and utilization of energy resources, including Wind Energy
Resources;
WHEREAS, under Republic Act No. 9513, otherwise known as the Renewable Energy Act
of 2008 (the "Act"), the exclusive right to explore and develop a particular renewable energy
area under the said Act shall be through a Renewable Energy Service Contract;
WHEREAS, pursuant to the Act, the RE DEVELOPER has agreed to enter into this RE
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Contract with the DEPARTMENT covering the Contract Area for the Project with the
corresponding rights and obligations stipulated herein;
WHEREAS, the RE DEVELOPER has been determined by the DEPARTMENT to be legally,
technically, and financially qualified to enter into this RE Contract;
NOW, THEREFORE, for and in consideration of the terms and conditions set forth herein,
the Parties hereby stipulate and agree as follows:
SECTION I. SCOPE. —
1.1. This RE Contract is entered into, with the services, technology and financing to be
furnished by the RE DEVELOPER for its conduct of Wind Energy Operations, in an economically
viable manner.
1.2. This RE Contract shall cover the Contract Area only as provided under Section V
(Contract Area) hereof.
1.3. The RE DEVELOPER is hereby appointed and constituted by the DEPARTMENT as
the Party having the exclusive right to explore, develop, and utilize the Wind Energy Resources
within the Contract Area as defined herein.
1.4. The RE DEVELOPER may pursue any Additional Investment or New Investment
within the Contract Area and shall be solely responsible for providing the necessary services,
technology, equipment and financing therefor. In case of New Investment, the Parties shall enter
into a new RE Contract at the option of the RE DEVELOPER, subject to approval of the
DEPARTMENT.
1.5. The RE DEVELOPER shall assume all the technical and financial risks under this RE
Contract without any guarantee from the GOVERNMENT and shall not be entitled to
reimbursement for any expense incurred in connection with this RE Contract.
SECTION II. DEFINITION OF TERMS. —
2.1 The words and terms under this RE Contract, unless otherwise specified in the Act
and its IRR or in relevant laws and regulations, shall have the meaning in accordance with the
following definitions: CADacT
a) "Abandonment and Termination Plan " refers to the plan prepared by the RE
DEVELOPER submitted within three (3) months from Effective Date in the case of
Pre-Development Stage and five (5) years from confirmation of the Declaration of
Commerciality and approved by the Department of Environment and Natural
Resources (DENR) and the DEPARTMENT for the decommissioning, abandonment
and surface restoration or rehabilitation of the Contract Area, and such
abandonment work plan may be amended, supplemented or modified by the Parties
from time to time;
b) "Accounting Procedures" refers to the set of procedures, guidelines, and
arrangement between the Parties, and any amendments thereto, to govern the
applicable treatment of expenses, costs, and income, set forth in Annex "B" hereof,
which forms an integral part of this RE Contract;
c) "Additional Investment" refers to investments relating to improvements,
modernization, rehabilitation, or expansion duly registered with the DEPARTMENT,
subject to the conditions to be determined by the DEPARTMENT, such as, but not
limited to, the following:
i. Identification of and investment in sequential phases/stages of production, or
undertaking scheduled modernization or rehabilitation of the Wind Energy
Systems; and
ii. Improvements to the Wind Energy Systems such as reduced
production/operational costs, increased production, improved operational
efficiency, and better reliability of the Project.
d) "Affiliate" refers to any person or group or persons, directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common control
with, the RE DEVELOPER. As used herein, "control" shall mean the power to direct or
cause the direction of the management's policies of a person by contract, agency, or
otherwise;
e) "Certificate of Confirmation of Commerciality " or "COCOC" shall refer to the
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Certificate duly signed by the DOE Secretary confirming the Declaration of
Commerciality by the RE Developer and shall serve as a notice to proceed for the
construction of the RE Project or the installation of the RE Facilities. The date of
issuance of the COCOC shall be considered as the commencement date of the
Development Stage of the RE Project;
f) "Certificate of Registration" refers to that certification issued to the RE
DEVELOPER upon the Effective Date of this RE Contract or upon approval of New
Investment, to serve as the basis for its entitlement to the incentives provided under
the Act;
g) "Commercial Operation" shall refer to the phase commencing at the operation of
the RE Project, following the successful testing and commissioning of the RE Project,
and confirming its readiness to inject power into the grid to sell or supply its
produced energy, as duly confirmed by the DEPARTMENT and other relevant
regulatory bodies;
h) "Commercial Quantities" shall mean quantities of electricity to be generated
using commercially available technology to develop the Wind Energy Systems
through proof of moderate to high wind speed, wind direction, wind density from the
Wind Energy Resources which have a reasonable chance of being sufficient and
technically compliant to operate and support the Commercial Operation of the
project;
i) "Contract Area" refers to an area where the RE DEVELOPER is given the exclusive
right to explore and develop the Wind Energy Resources and which is more
particularly described in a map with its technical description attached herein as
Annex "A" and made an integral part of this RE Contract.
j) "Contract Year " refers to a period of twelve (12) consecutive calendar months
counted from the Effective Date of this RE Contract and thereafter, from the
anniversary of such Effective Date;
k) "Corporate Income Tax" refers to the tax imposed upon net taxable income under
the National Internal Revenue Code (NIRC) of 1997, as amended by Republic Act No.
9337 and the Act. Upon the lapse of the period of the Income Tax Holiday (ITH)
under the Act, the RE DEVELOPER shall be subject to a Corporate Income Tax rate of
ten percent (10%);
l) "Cost of Goods Sold" refers to all business expenses directly incurred in the
exploration, development and utilization of the Wind Energy Resources in order to
produce and sell electricity and transmit the same to its intended location and use,
which expenses are particularly described in Annex "B" hereof;
m) "Declaration of Commerciality" refers to a written declaration by the RE
DEVELOPER stating that the electricity to be generated from the Wind Energy
Resources is of Commercial Quantities;
n) "Development Stage" refers to the development, production, or utilization of RE
resources, including the construction and installation of relevant facilities up to the
operation phase thereof;
o) "Effective Date " refers to the date of the execution of this RE Contract subject to
the payment of the signing fee and the posting of the performance bond covering
the first Contract Year as provided hereunder;
p) "Expatriate Expert" refers to a foreign national engaged by the RE DEVELOPER
and/or its Subcontractor/s involved in the Wind Energy Operations, who shall
exercise his technical profession, as allowed under existing laws;
q) "Expiration" refers to either the lapse of the term of this RE Contract as provided in
Section III (Term) hereof or the surrender, abandonment, or waiver of the RE
DEVELOPER of the entire Contract Area to the DEPARTMENT;
r) "Filipino Employee" refers to any citizen of the Republic of the Philippines
employed and/or engaged by the RE DEVELOPER and/or its Subcontractor/s involved
in the Wind Energy Operations under this RE Contract, and such engagement is
characterized as establishing an employer-employee relationship between such
citizen and RE DEVELOPER; cSEaTH
4.3 Should the DEPARTMENT find the Declaration of Commerciality without sufficient
basis, the RE DEVELOPER shall be given a one-time chance of thirty (30) calendar days from
receipt of the result of evaluation to rectify its submission. Otherwise, the request of issuance of
Certificate of Confirmation of Commerciality shall be denied.
SECTION V. CONTRACT AREA. —
5.1 The Contract Area refers to the areas as described in Annex "A" hereof, which the
RE DEVELOPER has exclusive right to explore, develop and utilize the Wind Energy Resources in
accordance with this RE Contract.
5.2 The RE DEVELOPER may, upon submission of written notice to the DEPARTMENT,
surrender or waive the entire Contract Area or any portion thereof without prejudice to any other
outstanding liability or costs. In case the RE DEVELOPER completely ceases its operations, the
provisions under its Abandonment and Termination Plan shall apply consistent with its
Environmental Compliance Certificate (ECC).
5.3 During Pre-Development Stage, the RE DEVELOPER shall delineate its Production
Area which shall be the final Contract Area during the Development Stage of the Project and
shall form part of its Declaration of Commerciality.
5.4 Any areas outside the proposed Production Area shall be deemed surrendered or
waived on the date of Declaration of Commerciality.
SECTION VI. WORK PROGRAM. —
6.1 The RE DEVELOPER shall carry out its existing work according to good industry
practices.
6.2 During the Pre-Development Stage, the RE DEVELOPER shall conduct a full Wind
Energy Resources assessment.
6.3 Attached to this RE Contract is a Work Program, details of which are particularly
described in Annex "C" hereof.
6.4 The RE DEVELOPER shall submit to the DEPARTMENT a Work Program for the first
five (5) years which shall form part of its Declaration of Commerciality and its corresponding
budget thereof.
6.5 Not later than two (2) months prior to the end of the first five (5) years from the RE
DEVELOPER's Declaration of Commerciality, the RE DEVELOPER shall submit a Work Program for
the next five (5) years and shall do so every five (5) years thereafter. The Work Program or any
revisions thereof shall require the approval of the DEPARTMENT.
During the implementation of the Project, the RE DEVELOPER shall submit for evaluation
and approval by the DEPARTMENT, a request for any revisions to the Work Program, upon
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determination of such revision. The DEPARTMENT shall act on the request for revision and
thereafter, the RE DEVELOPER may proceed to implement the activity without violating the
provisions on the Work Program: Provided, That revision shall not be allowed within the first two
(2) Contract Years. Provided, further, That the RE DEVELOPER shall be allowed to subsequently
revise its Work Program only if it has substantially complied with all its material financial and
technical activities under the Work Program for the immediate preceding Contract Year and such
revision shall be allowed only once per Contract Year.
6.6 In the event of failure of the RE DEVELOPER to comply with its commitments under
the Work Program, the DEPARTMENT shall call the performance bond posted by the RE
DEVELOPER. This is without prejudice to the right of the DEPARTMENT to terminate the RE
Contract.
SECTION VII. RIGHTS AND OBLIGATIONS. —
7.1 The RE DEVELOPER shall have the following rights:
a) To be granted fiscal and non-fiscal incentives and privileges under the Act and its
IRR and all other existing laws that are not otherwise modified or repealed by the
Act;
b) To receive assistance from the DEPARTMENT:
i. During the Pre-Development Stage, in securing access to lands and/or offshore
areas where Wind Energy Resources shall be harnessed; and
ii. In endorsing the Project to the other agencies of the National Government,
LGUs, Board of Investments (BOI) and other entities, for the acquisition of
permits, licenses and clearances and availment of applicable fiscal and non-
fiscal incentives.
c) Have at all times the right of ingress to and egress from the Contract Area to and
from facilities wherever located;
d) Acquire rights-of-way and similar rights on, over, under across and through the
Contract Area or properties adjacent to the Contract Area, which constitute or is
reasonably expected to constitute the Contract Area as the RE DEVELOPER may
reasonably deem necessary.
The DEPARTMENT shall, upon request by the RE DEVELOPER as may be reasonable
given the attendant circumstances, assist the RE DEVELOPER in securing such
rights. For such purpose, the DEPARTMENT shall and does hereby appoint the RE
DEVELOPER as its attorney-in-fact and does hereby give and grant to the RE
DEVELOPER full authority to act for and on its behalf in the negotiation and
conclusion of agreements and payments for such rights. All obligations, payments
and expenses arising from or incidental to the acquisition of such rights shall be for
the account of the RE DEVELOPER so as to enable the RE DEVELOPER to have
ingress into and egress from the Contract Area and to perform all Wind Energy
Operations in accordance with this RE Contract and in consideration of which,
entitlement to such rights shall be held in trust in favor of the RE DEVELOPER. DAaIEc
7.3 Upon the Effective Date of this RE Contract or upon the approval of the RE
DEVELOPER's New Investment, the DEPARTMENT shall issue a Certificate of Registration to the
RE DEVELOPER, to enable it to avail of the fiscal and non-fiscal incentives and privileges as
stated under the Act and its IRR. The registration shall be valid and effective for the entire term
and effectivity of this RE Contract.
SECTION VIII. REPRESENTATIONS AND WARRANTIES. —
Acknowledging that the GOVERNMENT, through the DEPARTMENT, has entered into this RE
Contract in reliance upon the representations and warranties in this Section, the RE DEVELOPER
represents and warrants as follows:
8.1 It is a corporation or entity duly formed, established, validly existing and in good
standing under the laws of the Philippines with full power to own its property; to carry on its
business as it is now being conducted; and to execute, deliver and perform its obligations under
this RE Contract, and the entering into and performance of this RE Contract by the RE
DEVELOPER does not conflict with the articles of incorporation, by-laws and other constitutive
documents of the RE DEVELOPER and has been duly authorized by all necessary corporate and
legal action on the part of the RE DEVELOPER;
8.2 There is no litigation, arbitration or administrative proceeding pending or, to the
best knowledge of the RE DEVELOPER, threatened against the RE DEVELOPER or its properties
the adverse determination of which would adversely affect the ability of the RE DEVELOPER to
perform or comply with any of its material obligations under this RE Contract;
8.3 The RE DEVELOPER:
a) Has not been declared in default in respect to any of its material financial
commitments or obligations based on their reports duly validated by the
DEPARTMENT;
b) Is not otherwise in default of any kind in respect of any financial commitment or
obligation or in respect of any agreement, undertaking or instrument as a party
thereof by which it or any of its assets or properties may be bound; and
c) Is not aware of a fact that by the service of notice and/or lapse of time would
constitute a default in any or both of sub-paragraphs (a) and (b) above.
8.4 No written material information given by the RE DEVELOPER to the DEPARTMENT
under this RE Contract contains any misstatement of fact as of the Effective Date or omits to
state a fact that is materially adverse to the interests of the DEPARTMENT; and
8.5 The ownership of the RE DEVELOPER's capital stock complies with applicable laws
and regulations.
SECTION IX. ASSETS AND EQUIPMENT. —
9.1 The RE DEVELOPER shall acquire and maintain for the Project and for its Wind
Energy Operations and such assets as are reasonably estimated to be required in carrying out
the exploration, assessment, harnessing, piloting and other studies for the Wind Energy
Resources in the Contract Area; and the development, utilization and commercialization of Wind
Energy Resources therein, including the construction, installation, operation and maintenance of
the Wind Energy Systems.
9.2 All materials, equipment, plants and other installations that are erected or placed
on the Contract Area by the RE DEVELOPER and are owned by the RE DEVELOPER shall remain
the property of the RE DEVELOPER up to one (1) year from the Expiration or Termination of this
RE Contract: Provided, That upon the written request of the RE DEVELOPER, the DEPARTMENT
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shall approve an additional non-extendible period of one (1) year within which to remove such
assets in the Contract Area. Thereafter, the ownership of any remaining materials, equipment,
plants, and other installations shall be vested in the Government.
9.3 The RE DEVELOPER shall be responsible for the removal and the disposal of all
materials, equipment and facilities from the Contract Area in accordance with the ECC and the
provisions of the Abandonment and Termination Plan as provided under Section II hereof.
9.4 The ownership of all data, records, accounts, samples and other technical data
produced or generated in the course of the Wind Energy Operations that are confidential,
proprietary in nature, or otherwise not generally available to the public shall remain with the
DEPARTMENT and RE DEVELOPER and shall be kept confidential in accordance with Section XII
(Confidentiality) hereof.
SECTION X. DATA AND REPORTS. —
10.1 All data and reports, except for proprietary techniques used in developing such
technical data and reports, must be submitted by the RE DEVELOPER in accordance with the
format approved by the DEPARTMENT.
10.2 The data and reports to be submitted to the DEPARTMENT shall include, but not
limited to, the following:
a) Annual Progress Report — shall be submitted not later than two (2) months prior to
the end of each Contract Year and shall contain the summary of accomplishments
under the approved Work Program, direct or indirect jobs generated, summary of
fiscal incentives availed in Philippine Peso and status of construction with relevant
comments and recommendation on any technical findings, among others;
b) Procurement Plan — shall be submitted not later than one (1) month from the
approval of the Work Program and shall be designed according to the approved
Work Program, containing an itemized list of equipment, materials, and supplies to
be procured with corresponding estimated costs;
c) Monthly Generation Report — shall be submitted within fifteen (15) days from the
end of each calendar month and shall include reservoir report and total electricity
generated, used and exported to the grid; DTEAHI
b) In the event that the RE DEVELOPER has fully expended its budgetary estimate
under the Work Program but has not fully performed its work obligations, the
amount of bond or other guarantee shall be equal to the succeeding Contract Year's
budgetary estimate under the revised Work Program; and
c) Such other conditions or circumstances as would reasonably warrant the
modification of the amount of the performance bond or other guarantee.
13.5 If the RE DEVELOPER, through its own fault, fails to observe or perform its work
obligations under the Work Program, the DEPARTMENT, upon prior written notice, may proceed
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against the performance bond or other guarantee, Provided That, should the work obligations
under the Work Program be fulfilled, and through the efficiency of the RE DEVELOPER, the
corresponding actual expenditures thereon are lower than the estimated expenditures stated in
the Work Program, the same shall be considered as full compliance of the work obligations.
13.6 The DEPARTMENT shall release the performance bond or other guarantee not
later than twenty (20) working days from the date of confirmation by the DEPARTMENT on the
start of the construction of the Geothermal Facility.
(Note: The amount for signing fee/bonus shall be based on the total Contract
Area at the rate of PhP100.00/has.)
SECTION XIV. SUSPENSION AND TERMINATION. —
14.1 In case of the Pre-Development Stage, the DEPARTMENT shall have the power to
terminate this RE Contract after due notice to the RE DEVELOPER on any of the following
grounds:
a) Non-compliance with the Work Program and the material terms and conditions of
this RE Contract;
b) Non-compliance with the RE technical design standards adopted by the
DEPARTMENT;
c) Tampering, falsifying or plagiarizing of technical design and feasibility study reports;
d) Non-payment of the financial obligations agreed upon under this RE Contract; and,
e) Non-posting of performance bond or other guarantee within the period/s provided
under Section XIII (Performance Bond) hereof.
14.2 In case of the Development Stage, the DEPARTMENT shall have the power to
terminate this RE Contract after due notice to the RE DEVELOPER on any of the following
grounds:
a) Non-compliance with the approved Work Program and the material terms and
conditions of this RE Contract;
b) Violation of the Renewable Portfolio Standards Rules, as defined in the Act and its
IRR and relevant Department Circulars;
c) Non-compliance with the RE technical design standards adopted by the
DEPARTMENT;
d) Tampering, falsifying or plagiarizing of technical design, feasibility study generation
and operation reports;
e) Non-remittance of Government Share as determined by the Compliance Division —
Financial Services of the DEPARTMENT;
f) Non-payment of the financial obligations agreed upon under this RE Contract;
g) Non-posting of performance bond or other guarantee within the period/s provided
under Section XIII (Performance Bond) hereof.
14.3 In case the default of the RE DEVELOPER on account of any of the foregoing
grounds is attributable to Force Majeure, the obligation of the RE DEVELOPER may be suspended
for a period of one (1) year or until the Force Majeure event ceases to exist whichever comes
earlier subject to the following conditions:
a) The RE DEVELOPER shall file a notice of Force Majeure to the DEPARTMENT within
fifteen (15) calendar days from its existence;
b) After due validation which shall be made within twenty (20) working days from
receipt of such notice, the DEPARTMENT shall issue an approval of suspension of
contractual obligation/s affected by Force Majeure;
c) The RE DEVELOPER shall continue to post the performance bond, if necessary,
observe administrative requirements and comply with reportorial obligations on its
work commitments not affected by Force Majeure;
d) Once the Force Majeure had ceased, the RE DEVELOPER shall notify the
DEPARTMENT within five (5) calendar days from cessation together with the revised
Work Program covering the remaining contract term;
e) Any failure or delay on the part of either Party in the performance of its obligations
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or duties hereunder shall be excused to the extent attributable to Force Majeure;
f) If the Wind Energy Operations are curtailed or prevented by such causes, then the
time for enjoying the rights and carrying out the obligations thereby affected, and all
rights and obligations hereunder shall be extended for a period equal to the period
of delay, curtailment or prevention: Provided, however, That the suspension of
obligation shall in no way extend the term of the RE Contract. Provided, further, That
if operations are delayed, curtailed or prevented by Force Majeure for a continuous
period of twelve (12) months, this RE Contract may thereafter be terminated, at the
option of the RE DEVELOPER, at anytime that the Force Majeure condition still exists,
subject to confirmation of the DEPARTMENT; and
g) The Party whose ability to perform its obligations is so affected shall notify the other
Party thereof in writing stating the cause and such affected Party shall do all
reasonably within its power to remove such cause.
14.4 Notwithstanding the foregoing, this RE Contract shall be terminated without
prejudice to the RE DEVELOPER's obligation which survive the termination of this RE Contract. HASDcC
16.2 During the Pre-Development Stage, the RE DEVELOPER shall, upon request of the
DEPARTMENT provide development assistance in kind in the amount of (PhP____________). Upon
confirmation of the Declaration of Commerciality, the RE DEVELOPER shall, upon request of the
DEPARTMENT, provide development assistance in kind in the amount of (PhP____________).
16.3 During the Pre-Development Stage, the RE DEVELOPER shall provide assistance
for training programs, conference seminars and other similar activities for the DEPARTMENT's
personnel in the amount of (PhP____________) per Contract Year. During the Development Stage,
the RE DEVELOPER, upon request of the DEPARTMENT, shall provide assistance for training
programs, conference seminars and other similar activities for the DEPARTMENT's personnel in
the amount of (PhP____________) per Contract Year. This assistance shall be accumulated for the
succeeding Contract Years if not availed of in a given Contract Year. The RE DEVELOPER shall
pay the unutilized amount of the training commitment prior to the Expiry or Termination of this
RE Contract.
16.4 The RE DEVELOPER shall undertake corporate social responsibility projects in
Host LGUs with focus in education and training of qualified and deserving beneficiaries, as
determined by the RE DEVELOPER.
(Note: The funds for training program and development assistance shall be
computed based on the total Contract Area at the rate of PhP100.00/has. during Pre-
Development Stage. During Development Stage, the funds shall be at the rate
PhP300.00/has. for training program and PhP600.00/has. for development assistance
or both PhP50,000.00 whichever is higher except that projects with installed capacity
of 1MW and below shall be exempt from these financial obligations.)
SECTION XVII. MISCELLANEOUS PROVISIONS. —
17.1 NOTICES
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Any notice required or given by either Party to the other Party shall be (i) in writing and
delivered personally or sent by registered or certified mail, commercial courier service to the
address designated in writing, (ii) by facsimile to the number most recently provided to such
party or such other address or fax number designated in writing by such party and (iii) by
electronic mail, to the electronic mail address designated in writing by such party or such other
electronic mail address as may be later designated in writing by such party.
Any notice or other communication so transmitted shall be deemed to have been given:
(a) on the day of delivery if delivered personally; (b) one (1) business day after delivery to a
commercial courier service; (c) five (5) days after mailing if sent by registered mail, return
receipt requested, postage prepaid; or (d) when sent by electronic mail or facsimile, using the
email address and facsimile number herein below provided if sent during normal business hours
of the recipient, and if not so confirmed, then on the next business day. All such notices shall be
addressed:
To the DEPARTMENT:
The Secretary
Department of Energy
Office Address
Email Address
Telephone/Fax Numbers
To the RE DEVELOPER:
Designation
Company Name
Office Address
Email Address
Telephone/Fax Numbers
Any Party may substitute or change such address with prior written notice thereof to the
other Party.
17.2 GOVERNING LAW
The laws of the Republic of the Philippines shall apply to this RE Contract.
17.3 ASSIGNMENT
a) The RE DEVELOPER may assign this RE Contract to a third party subject to the prior
written approval of the DEPARTMENT. This RE Contract shall not be assigned to any
third party, unless such third party is qualified in accordance with the Act and its
IRR.
b) The RE DEVELOPER may assign or transfer part or all of its rights and/or obligations
under this RE Contract to its Affiliate upon compliance with the following provisions:
i. The RE DEVELOPER shall submit to the DEPARTMENT copies of the written
document which unequivocally shows the agreement of the parties thereat to
the assignment of the RE Contract; and
ii. In the case of a partial assignment, the RE Developer shall guarantee in
writing to the Department the performance of the assigned obligations.
c) The RE DEVELOPER may authorize its subsidiaries, branches or regional corporations
to implement this RE Contract, but the RE DEVELOPER shall remain responsible for
the performance of this RE Contract.
d) During the Pre-Development Stage, this RE Contract shall not be assigned except
where the assignee is a subsidiary, branch or regional corporation of the RE
DEVELOPER created for the special purpose of handling the project covered by the
RE Contract.
e) No assignment shall be granted if the RE DEVELOPER is in default of its Work
Program or any of its material obligations under the RE Contract and other RE
agreements with the DEPARTMENT. ATaDHC
By: By:
___________________________ ___________________________
NAME PRINCIPAL SIGNATORY
Secretary Designation
WITNESSES
___________________________ ___________________________
NAME NAME OF WITNESS
Director IV, REMB Designation
Competent
Date and Place of
Name Evidence of
Issuance
Identity
DOE SECRETARY
known to be the same person described in the foregoing instrument, who acknowledged before
me that her signature on the instrument was voluntarily affixed by him/her for the purposes
stated therein, and who declared to me that she executed the instrument as her free and
voluntary act and deed as well as the free and voluntary act and deed of the government agency
herein represented.
This RE Contract consisting of twenty-five (25) pages, including the page on which the
acknowledgment is written, is signed on each and every page thereof by the Parties and his
instrumental witnesses and sealed with my notarial seal. acEHCD
NOTARY PUBLIC
Doc. No. _________;
Page No. _________;
Book No. _________;
Series of _________.
ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES )
CITY OF TAGUIG ) S.S.
Before me, a Notary Public duly authorized in the City of Manila, this
________________________, personally appeared:
Competent
Date and Place of
Name Evidence of
Issuance
Identity
DATE/Place of
FULL NAME ID/ID No.
Issuance
known to be the same person described in the foregoing instrument, who acknowledged before
me that her signature on the instrument was voluntarily affixed by him/her for the purposes
stated therein, and who declared to me that she executed the instrument as her free and
voluntary act and deed as well as the free and voluntary act and deed of the government agency
herein represented.
This RE Contract consisting of twenty-five (25) pages, including the page on which the
acknowledgment is written, is signed on each and every page thereof by the Parties and his
instrumental witnesses and sealed with my notarial seal.
WITNESS MY HAND AND SEAL on ________________ at ________________.
The RE DEVELOPER shall render to the DEPARTMENT a Statement of All Charges and
Credits to the RE Operations, summarized by appropriate classifications indicative of the nature
thereof.
h) Communication
i. The cost of leasing, operating, repairing, and maintaining communication
systems, including radio and satellite communication facilities directly related
to the RE Operations; and
ii. For home office-based Technical employees, the cost of the communication
facilities shall be charged based on the percentage of usage of these facilities
directly related to the RE Operations.
i) Depreciation of Tangible Investment
The cost of physical assets classified as depreciable in accordance with the
International Accounting Standards as adopted in the Philippines as may be
applicable to or relevant to the RE industry and as defined in Article II, Section 2
(Depreciable/Amortizable Tangible Investments), incurred and purchased and/or
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fabricated by the RE DEVELOPER, and used by the RE DEVELOPER in its RE
Operations shall include such cost as export broker's fees, purchasing agent's fees,
transportation charges, loading and unloading fees, license fees associated with the
procurement of materials and equipment, duties and customs fees, in-transit losses
not recovered through insurance, and installation cost necessary to put the property
ready for use. All Tangible Investment acquired during the Pre-Development Stage
or Development/Commercial Stage shall be allocated as part of the Cost of Goods
Sold over the estimated useful life of the assets, including the cost of the following:
(Geothermal)
i. Production and injection wells
ii. Well testing equipment
iii. Fluid gathering equipment
iv. Fluid separation equipment
v. Power Plant and civil works
vi. Pipelines
vii. Laboratory equipment
viii. Field survey equipment
ix. Site Office furniture and fixtures/equipment used in direct support of
Geothermal Operations
x. Tools and equipment
xi. Automotive equipment
xii. Communication facilities
xiii. Housing facilities used in direct support of Geothermal Operations
xiv. Leasehold improvements with estimated life of over one (1) year
xv. Other capital expenditures classified as tangible investments following
generally accepted RE industry accounting principles and practices
(Wind)
i. Wind Turbine generators
ii. Accessory electrical equipment
iii. Miscellaneous Power Plant equipment
iv. Road, railroads and bridges
v. Communication facilities used in direct support of the Wind Energy operations
vi. Energy Storage facilities
vii. Other necessary equipment for the production of electricity from Wind energy
classifiable as tangible investments following generally accepted RE industry
accounting principles and practices
(Solar)
i. Solar photovoltaic panels, support structures, foundations and appurtenant
facilities
ii. Cabling and other electrical equipment
iii. Accessory electrical equipment
iv. Miscellaneous Power Plant equipment
v. Road, railroads and bridges
vi. Communication facilities used in direct support of the Solar Energy operations
vii. Energy Storage facilities
viii. Other necessary equipment for the production of electricity from Solar
energy classifiable as tangible investments following generally accepted RE
industry accounting principles and practices
(Ocean)
i. Ocean Energy platforms, sluice gates, wicket gates, draft tubes
ii. Bulb hydro/saltwater turbines, generators
iii. Accessory electrical equipment
iv. Miscellaneous equipment for the Generation Facility/ies and onshore
fabrication, ocean energy
v. Break Water structures, roads, railroads and bridges
vi. Communication facilities used in direct support of the Ocean Energy
operations
vii. Energy Storage facilities
viii. Other necessary equipment for the production of electricity from Ocean
energy classifiable as tangible investments following generally accepted RE
industry accounting principles and practices
j) Amortization of Leasehold Improvements
Improvements and betterments on leasehold that are directly used in the RE
Operations can be capitalized in accordance with the International Accounting
Standards as adopted in the Philippines. Such expenditures shall be amortized over
its estimated economic life.
k) Amortization of Intangible Investments Software Licenses
Notwithstanding any other provision of this Accounting Procedures software licenses
directly related to the RE Operations shall be amortized based on RE Developer's
policy or ten (10) years whichever is shorter and, shall form part of the Cost of
Goods Sold.
l) Other Plant Overhead directly related to the operations of the Generation
Facilities, such as plant insurance, safety expense, freight and handling expense,
reforestation and environmental expense, gas and oil, permits, and licenses.
3. Items not considered or allowed as Cost of Goods Sold
The following cost and expenditures shall not be considered or allowed as part of the Cost
of Goods Sold for the purpose of the computation of the Government Share:
a) Processing or application fees, bonuses, and other payments made to the
DEPARTMENT, such as payments for signature bonus, discovery bonus, production
bonus, tax exemption certificates and other DOE-administered funds;
b) Registration/Application fees with other government agencies;
c) Cost attributed to posting of the performance bond or other guarantee required
under the RE Contract;
d) Expenditures in respect of any financial transaction to negotiate, float, or otherwise
obtain or secure funds;
e) Expenditures incurred in obtaining, furnishing, and maintaining the performance
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bond and other guarantees required under the RE Contract and any other amounts
spent on indemnities with regard to non-fulfillment of contractual obligations;
f) Fines penalties, costs and expenditures incurred as a result of willful misconduct or
negligence of the RE DEVELOPER;
g) Cost incurred in the creation of any partnership or joint venture arrangement;
h) Membership and club dues not related to professional organizations;
i) Cost incurred as a result of failure to insure, where insurance is required pursuant to
the RE Contract, or where the RE DEVELOPER has under-insured; and
j) Spot market costs and downstream related charges.
4. Other Income
All other income and proceeds received under the RE Contract, including but not limited to
the items below, shall be credited to the accounts under the RE Contract, and shall be treated
as:
As offset against Cost of Goods Sold:
i. Proceeds from any insurance or claim or judicial awards in connection with the
Operations under the RE Contract;
ii. Any adjustment, refunds or other credits received by the RE DEVELOPER from the
suppliers or manufacturers or their agents in connection with defective materials,
the cost of which was previously charged by the RE Developer to the accounts under
the RE Contract;
iii. Cost originally charged to the accounts under the RE Contract for materials
subsequently exported from the Philippines but not used in the Operations under the
RE Contract. cDCEIA
ANNEX G
Timeline for Awarding of RE Contract under Open and Competitive Selection Process
1. Publication date of Pre-Determine Area (PDAs) (Day 1)
2. Pre-Submission Conference (Day 1 + 20 calendar days)
3. Submission of documents by PDA applicants (Day 1 + 60 calendar days, on or before
1200H to be submitted at the DOE Records Section)
4. Opening of documents and payment of processing fee (Day 1 + 60 calendar days,
1300H, at the DOE-AVR or as specified)
5. Evaluation of documents (Day 61 + 10 working days)
6. Endorsement of results for concurrence of Supervising Assistant Secretary (Day 71
+ 2 working days)
7. Concurrence of the Supervising Undersecretary (73 + 3 working days)
8. Secretary's approval of the results (Day 76 + 5 working days)
9. Pre-signing of RE Contract (Day 81 + 3 working days)
10. Referral to Legal Services for concurrence (Day 84 + 3 working days)
11. Referral to Supervising Assistant Secretary (Day 87 + 2 working days)
12. Referral to Supervising Undersecretary (Day 89 + 3 working days)
13. Endorsement with legal concurrence to the Secretary (Day 92 + 7 working days)
14. Signature of the Secretary/Awarding of RE Contract (Day 99)
ANNEX H
Letter of Intent (LOI) Template for RE Contract Application
Director
Renewable Energy Management Bureau
Department of Energy
Subject: Letter of Intent to Apply for (type of RESC)
Dear Director ____________:
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We wish to express our intent to apply for RE Contract for the development of (RE
resource type) project with an estimate potential capacity of _____ MW.
Our proposed project site is located in ________________________ (town, province) with an
area of approximately ______ (sq.m/sq.km) specifically defines as follows:
(Please see Annex K of this Circular on the format of technical descriptions required
for Area Clearance)
Enclosed is the notarized Letter of Authority for individual and Board Resolution for
corporation (if applicable) for reference.
Thank you.
Very truly yours,
________________________________
Signature over printed name
Applicant or Authorized representative
Address:
Email address:
Facsimile No.
Mobile No:
ANNEX I
Checklist of Requirements for Renewable Energy (RE) Contract Application
ANNEX I.1
Template Five (5)-Year WP for BEOC
Biomass Energy Operating Contract (BEOC)
ANNEX I.2
Template Seven (7)-Year WP for GSC
Seven-Year Work Program for Geothermal Service Contract
ANNEX I.3
Template Five (5)-Year WP for SEOC
Five-Year Work Program for Solar Energy Operating Contract
ANNEX I.4
Template Five (5)-Year WP for HSC
Work Program for Hydropower Project
ANNEX I.5
Template Seven (7)-Year WP for OSC
Work Program for Ocean Power Project
ANNEX I.6
Template Five (5)-Year WP for WESC
Wind Work Program
ANNEX J
Mapping Requirements for RE Contract Application
A. Common Mapping Requirements
1. Certificate of Geographic and Grid Coordinates of the tie point used in the actual
land survey of the project site issued by DENR.
ANNEX J-2
Lot Data Computation/Area Sheet
Section I. Amendment
Acknowledgement
Section I. Amendment
Acknowledgment
ANNEX L
Requirements for the RE Contract Transition from Pre-Development to Development Stage
1. Letter of Declaration of Commerciality indicating the capacity of the project in
megawatt (MW) HTCaAD
2. Gantt Chart of the initial 5-Year Work Program following an approved template
(Annex A-1)
3. Map of the Production Area in acceptable ITMS format (Annex K)
4. Proof of ownership or possessory rights over the Production Area
5. Feasibility Study covering the following minimum activities:
a. Market Study — must identify assumptions used in a target market/s (e.g., as
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merchant plant, with Power Purchase Agreement, or in spot market).
b. Technical Study — with the following supporting documentary requirements:
i. Proof or undertaking to secure proof of ownership of or exclusive right to
develop the production area and right of way;
ii. Resource Assessment Report with raw and processed data;
iii. Final layout, single line diagram, general specifications and annual energy
production (AEP) of the project;
iv. Geotechnical Study Report;
v. System/Distribution Impact Study Report; and
vi. Detailed Engineering Design of the Project, if applicable.
c. Management Study — containing strategies of development and construction of the
project including the entities who will be involved as EPC Contractor, Owner's
Engineer and O & M Contractor covered by Agreements/Contracts, if applicable.
d. Certified true copy of acquired applicable permits, licenses, agreements,
endorsements and clearances.
e. Financial/Economic Study — on the results of analysis and interpretation of the
viability of the project under the Base Case scenario (P50 or higher) and sensitivity
analysis.
Supporting documents:
i. Financial model/s; and
ii. Proof of Financial Closing.
ANNEX M
Certificate of Registration