Will EPC contracts provide for the handover of a solar facility?
EPC Contracts will not provide for the handover of the solar facility to the Project Company, and the PPA will not become effective until all commissioning and reliability trialling has been successfully completed.
Should you choose an EPC contract for a solar project?
Given the significant monetary value of EPC Contracts, and the potential adverse consequences if problems occur during construction, the lowest price should not be the only factor used when selecting a Contractor. As noted earlier, an EPC Contract is one of a suite of agreements necessary to develop a solar project.
What happens if the EPC contract is uncertain?
Any uncertainty in the EPC Contract may unfortunately see the Contractor liaising directly with these third parties and possibly risking the relationship of the Project Company with key influencers, customers and long-term neighbours.
Why should a project company invest in a solar facility?
• Performance guarantees: The Project Company’s revenue will be earned through the operation of the solar facility. Therefore, it is vital that the solar facility performs as required in terms of output, efficiency and reliability.
What is an EPC project?
EPC projects that are also known as ‘turnkey’ and as the contractor assumes responsibility for engineering services, procurement of materials, hiring of teams and materials, and execution of the work, among other tasks, to deliver the project ready to be operated by the client by a given deadline and with a number of guarantees.
What is a bankable EPC contract?
A bankable EPC Contract is a contract with a risk allocation between the Contractor and the Project Company to the satisfaction of Lenders and their credit committees.
EPC contracts in the solar sector
The Project Company needs only to turn a key to start operating the facility, hence EPC Contracts are sometimes called ‘turnkey’ construction contracts. The Contractor must deliver the
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