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Home > Project Financing  - MOU for EPC contractor and financing for power plant project


 

MOU for EPC contractor and financing for power plant project

 

MEMORANDUM OF UNDERSTANDING

(Draft)
 
 

BETWEEN

Employer
 

AND

 
EPC contractor
 

FOR

 
THERMAL 3 1x150 MW Project
 
 

                    Beijing            March   , 2009

 
 
 
 

MEMORANDUM OF UNDERSTANDING

 
This Memorandum of Understanding (hereinafter referred to as “MOU�? is entered into this   day of  March, 2009.
 
BETWEEN
 
1.                       Employer is located in South America. (hereinafter referred to as "employer") on the other part
 
AND
 
2.                       Contractorxxxxx a state owned company registered xxxxx District, Beijing, China (hereinafter referred to as "contractor") on the other part.
 
WHEREAS, Employer desires to build a generating coal-fire power plant 1x150 MW, located xxxxx, South America(hereinafter referred to as "Project").and
 
WHEREAS, employer acknowledges hereby that Contractor has fully capacity and experience to contract in Project basis on EPC method, and
 
WHEREAS, CONTRACTOR is willing to being EPC Contractor to develop the Project for EMPLOYER,and CONTRACTOR has agreed to execute his obligations on the terms and conditions set forth in the MOU.
 
NOW THEREFORE, EMPLOYER and CONTRACTOR agree to enter into a MOU on the basis of mutual benefit, the contents are as follows:
 
ARTICLE 1: SCOPE OF THE MOU
 
The Project is located in xxxxxx, South America.
1.1  CONTRACTOR undertake to construct  a generating coal-fire power plant 1x150 MW with all Auxiliary Equipment and relevant Infrastructure. on turnkey basis
 
 
 
1.2      CONTRACTOR undertakes to provide expertise and resources for the Project Moreover, CONTRACTOR will assist EMPLOYER to apply buyer credit and soft loan from The Export Import Bank of China or other Chinese banks, and Ministry of Commerce of China,
 
1.3    The parties shall make best effort to make the project a success. The EMPLOYER shall grant sole mandate to CONTRACTOR for implementation of the project.
 
1.4   The parties agree to negotiate and enter into an EMPLOYER Contract    Agreement (TCA) in which detailed scope of works and project cost will be determined. Such project cost is based on the year 2009 price level. In negotiating the TCA, the parties will conduct such negotiation on the basis of the principles set forth in this MOU.
 

ARTICLE 2: RESPONSIBILITIES OF EMPLOYER

 
2.1 Undertake and make available to CONTRACTOR the services and facilities such as regulatory and statutory approvals, licenses, work and travel permits, land rights access and other rights of way and any other agreements or authorizations from the Columbian government.
 
1.3 Coordinate regional or local governments, local communities, landowners, government agencies or state enterprises / authorities that may be necessary or may facilitate for the timely development and implementation of the project.
 
1.4 Provide complete set of relevant information and documents that may facilitate the development of the Project.
 
1.5 Be responsible for the relocation of local inhabitants and dwellings, so that CONTRACTOR can carry out the work of the project smoothly.
 
1.6 Provide 15% of the project cost as down payment.
 
1.7 Provide assistance to CONTRACTOR during the personnel of CONTRACTOR executing engineering investigation and technical survey in project site.
 
1.8 Responsible for all aspects of development such as feasibility study and environment impact assessment report. The feasibility study should be of international standard and acceptable to international lenders and multilateral financing agencies.
 
ARTICLE 3: RESPONSIBILITES OF CONTRACTOR
 
3.1     shall be offer a formal commercial and technical proposal as per EMPLOYER’s enquiry document and other relevant document.
3.2     assistance EMPLOYER for applying for buyer’s credit and soft loan in sum of about 85% of the project cost from The Export and Import Bank of China or other Chinese banks, Ministry of Commerce of China and China Export Credit Insurance Corporation under the following conditions will be discussed with EMPLOYER in future and It shalll be specified in loan agreement between Export and Import Bank of China or other Banks and EMPLOYER :
 
3.2.1     Grace period to be decided by contract.
 
                Repayment period: shall be determined according to the policy of Banks.
 
3.2.3     Interest rate to be decided by contract.
 
3.2.4   Guarantee for the deferred payment: Letter of Guarantee provided by the Government of Columbia or a bank guarantee issued by bank of Columbia
 
3.3     After the formal signature of MOU by both Parties, CONTRACTOR shall dispatch a group of experts to investigate the sites and to discuss the relevant technical issues with EMPLOYER.
 
ARTICLE 4: GENERAL PROVISIONS
 
4.1          TERM AND TERMINATION
    
4.1.1      This MOU shall remain in full force and effective for a term of six (6) months from the date hereof after which term of the MOU shall be deemed to be terminated. This MOU may be extended for such further periods as the parties hereto may require and mutually agree by giving request to do at least 60 (sixty) days before the expiration of the said term.
 
4.1.2      During the mandate period, this MOU shall terminate upon the first to occur of the following events:
 
(a)                 The execution of the TCA
(b)                 The unanimous termination of the MOU by the parties evidenced in writing.
 
 
4.2     CONFIDENTIALITY
               EMPLOYER  and CONTRACTOR agree to treat this MOU (including but not limited to subsequent documents, arrangements, plans, correspondences, etc.) as confidential and private matters exclusively between the Parties. It is understood that the information should not be released or allowed to be released to any other third parties, which may result in negative effects to the Project or to the Parties or the advantages of any other third party. However, it may be desirable or necessary to provide appropriate information or documents to prospective investors, financiers, consultants, advisers, or international/multilateral agencies or the likes. In such cases, the Parties agree to seek where possible consent from the other Party prior to communicating/providing such information approval of which shall not be unreasonably withheld.
 
4.3     GOVERNING LAW
 
This MOU is governed by laws of the Singapore.
 
4.4     TRANSPARENCY
               The parties will provide clear and sufficient information to each other in order that the principal issues of or related to the Project are understood by the Parties. Public involvement will be encouraged throughout the Project.
 
IN WITNESS WHEREOF, the Parties hereto report this MOU to the respective government for approval and to be duly executed and delivered by their respective duly authorized persons as of the date first above written.
 
THIS MOU is made in English in two originals. Both Parties have read and thoroughly understood the contents hereby affixed their respective signature and seals (if any) in the presence of witnesses.
 
IN WITNESS WHERE OF, the parties hereto have set their hands on the day and year first above written before witness and each retains one original document of each version.
 
 
 
 
 
 
 
 
SIGNED FOR AND ON BEHALF OF    SIGNED FOR AND ON BEHALF OF
EMPLOYER                             Contractor
                                          
 
BY:                                    BY:
 
 
 
 
                                                                    
NAME: Mr                              NAME: Mr.
TITLE:                                      TITLE:
 
 
 
Witnessed by:                            Witnessed by:
 
 
 
 
 
                                                                       
NAME:                                 NAME:
TITLE:                                 TITLE:




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