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Financial guarantee of the fulfillment of PPA

FINANCIAL GUARANTEE OF THE FULFILLMENT OF THE TERMS OF THE PURCHASE AGREEMENT

For the conclusion of the purchase agreement, the applicant, who was recognized as an auction winner, in accordance with the provisions provided in the Rules for the centralized purchase and sale of the electric energy generated by the objects on use of renewable energy sources, the recalculation and redistribution by the financial settlement center of the corresponding share of electric power to qualified conditional consumer on the basis of the results of the calendar year (hereinafter – ‘Rules of centralized purchase’), 60 calendar days from the date of its inclusion and its corresponding project on the construction of an object on use of RES in the list of energy producing organizations using RES, published on the Internet resource of the authorized body, submits an Application for the conclusion of a purchase agreement for the purchase of electricity to Financial Settlement Center of Renewable Energy Sources LLP (hereinafter – ‘FSC of RES’).

The applicant chooses one of the following types of financial guarantee of the fulfillment of the terms of the purchase agreement:

  1. a guarantee cash contribution, which is paid to a special bank account of FSC of RES in tenge;
  2. bank guarantee or standby letter of credit issued by the SWIFT system. A bank guarantee or a standby letter of credit is issued in tenge.

If the Applicant has decided to issue a bank guarantee (standby letter of credit) as a financial security for the fulfillment of the terms of the purchase agreement, then the Applicant independently selects the Bank in which it will issue a bank guarantee (standby letter of credit) as financial security for the fulfillment of the terms of the purchase agreement. Please note that in accordance with Paragraph 95 of the Rules of centralized purchase, a bank guarantee or a standby letter of credit must be submitted by the Applicant:

  1. from the resident banks of the Republic of Kazakhstan with the long-term credit rating in foreign currency not lower than "B" by Standard & Poor's or "B-" by Fitch or "B3" by Moody's Investors Service or with the rating of the parent organization (which owns more than 50% of the shares of the resident bank of the Republic of Kazakhstan) not lower than the "BBB" level by Standard&Poor's or "BBB" by Fitch or "Baa2" by Moody's Investors Service;
  2. from non-resident banks in the Republic of Kazakhstan with the long-term credit rating in foreign currency not lower than "ВВВ" by Standard&Poor's, "ВВВ" by Fitch, "Ваа2" according to Moody's Investors Service.

At the same time, a bank guarantee or a standby letter of credit from non-resident banks of the Republic of Kazakhstan must be confirmed by resident banks, by issuing a guarantee for counter-obligations of non-residents under subparagraph 1) of this paragraph.
The amount of financial guarantee of the fulfillment of the terms of the purchase agreement is 10,000 (ten thousand) tenge per 1 (one) kW of installed capacity multiplied by the installed capacity of the renewable energy object specified in the Register of Auction winners.

Note*. For example, your company became the auction winner bidding for the selection of renewable energy projects for a solar power plant. The installed capacity of the project indicated in the register of auction winners is 50,000 kW, then the amount of financial security for meeting the terms of the purchase agreement will be:
50,000 (kW) * 10,000 ( KZT / kW) = 500,000,000 tenge.

When applying to the Bank for obtaining financial guarantee of the fulfillment of the terms of the purchase agreement, be sure to check the compliance of the Bank chosen by you, with the criteria specified in paragraph 95 of the Rules of centralized purchase. In case of inconsistency of the financial guarantee chosen by you by the Bank for the fulfillment of the terms of the purchase agreement, it will not be accepted by FSC of RES.

After the financial guarantee of the application for participation in the auction has been issued (in the form of a bank guarantee or a standby letter of credit), the applicant must advise the issued financial guarantee of the fulfillment of the terms of the purchase agreement with the Partner Bank of FSC of RES: ForteBank JSC (if the bank guarantee was issued by ForteBank JSC, then it is necessary to advise it in Bank CenterCredit JSC).

All bank commissions and expenses related to the financial guarantee of the fulfillment of the terms of the purchase agreement, including the beneficiary's Bank commissions, are paid by the auction winner (seller).

A bank guarantee or a standby letter of credit is irrevocable and provides for the possibility of their performance in whole or in part by the designation of the recipient (beneficiary) with a validity from the date of signing the purchase agreement:

  • for solar – not less than 25 months;
  • for wind and biogas – not less than 37 months;
  • for hydro – not less than 49 months.

Financial guarantee of the fulfillment of the terms of the purchase agreement is withheld in the order prescribed in paragraph 98 of the Rules of centralized purchase in the following cases:

  1. if a copy of the notification on the beginning of construction and installation works for the use of renewable energy has not been provided within 12 months from the date of signing the purchase agreement, in respect of which a purchase agreement is submitted to the state body exercising state architectural and construction control - at a rate of 30% from the amount of financial guarantee of the fulfillment of the terms of the purchase agreement;
  2. in case of not providing a copy of the act of acceptance of the object on use of renewable energy into operation, approved in accordance with the legislation of the Republic of Kazakhstan in the field of architectural, town-planning and construction activity, in respect of which the purchase agreement is concluded - in the amount of 100% of the financial guarantee of the fulfillment of the terms of the purchase agreement, and in the event of withholding part of the financial guarantee of the fulfillment of the terms of the purchase agreement in accordance with subparagraph 1) of this paragraph, 70% of the amount of the financial guarantee of the fulfillment of the terms of the purchase agreement within the following terms from the date of signing the purchase contract:

           - for solar – in 24 months;
           - for wind and biogas – in 36 months;
           - for hydro – in 48 months.

Below you can download the form of bank guarantee (standby letter of credit) of the fulfillment of the terms of the purchase agreement.

For the purposes of processing the financial guarantee of the fulfillment of the terms of the purchase agreement, we give the details of the "Financial Settlement Center for the Support of Renewable Energy Sources" LLP:

Legal address: Astana, Tauelsizdik Ave., 59

Tel./Fax: +7 7172 69 37 25

BIN 130840019312

Certificate of registration for VAT Series 62001 No. 0020007 dated 11.12.13

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