Financial and strategic support to the Government of Jordan for the renegotiations of PPAs
The Government of Jordan has requested support from CONNEX (EU, GIZ) for the renegotiation of up to 39 renewable (wind and solar) and conventional (gas) power purchase agreements (PPAs). Rebel has been contracted by CONNEX to provide strategic and financial guidance on the renegotiation process.
The challenge
According to the Ministry of Energy and Mineral Resources (MEMR), the reason for the renegotiation is the imbalance in profit-sharing of these PPAs, caused by altered socio-economic circumstances since the initial contract signing and financial close. This currently results in an unfavourable distribution of costs and benefits, to the detriment of Jordanian users.
The approach
Support is provided in four stages: first, all relevant PPAs and supporting studies are analyzed to map possible renegotiation angles. Then, using financial modelling, high-impact renegotiation angles are quantified and ranked. The team also prepares a negotiation strategy and roadmap, coupled with institutional capacity-building components on financial modelling and contract negotiation techniques.
Finally, we assist MEMR representatives directly during the renegotiation sessions with IPPs.
Impact
Lowering the cost of power for Jordanian users and streamline contractual obligations of the GoJ in more balanced and fair terms.
