Vuselela Energy will be the “Owner” and “Operator” of the plant for the contract period, after which ownership is transferred to the project host.
Vuselela will therefore provide the full capital requirement for the establishment of the project and be responsible for its operation and maintenance.
Fundamental to the BOOT model is the establishment of a Power Purchase Agreement (PPA), which complicates regulatory, legal and financial aspects of the venture since penalties on both sides need to be negotiated and agreed prior to financial close. The BOOT model is therefore not Vuselela’s preferred model.
This model includes the following features:
- Vuselela will provide the full Capital Investment for establishment of the plant.
- Land and utilities will be made available to the SPV at zero cost.
- Over-the-fence gas supply will be provided to the SPV at zero cost.
- The electricity generated by the co-generation plant will be supplied to the project host or exported to the grid at benchmark market pricing under a PPA.
- All revenue from sales of electricity will accrue to the SPV, whether or not the power is used on-site or exported into the national grid
- Certified Emission Reductions (CERs) will be shared between Vuselela and the project host on a mutually agreed and economically viable basis.
Vuselela will assume full responsibility for the Carbon Asset Management activities.