Document ID: chunk:federal_register_of_legislation:F2024L01074:body:0:p55
Version: federal_register_of_legislation:F2024L01074
Segment Type: other
Provision Reference: 
Character Range: 155946–161443

procurement contract (EPC).                                                                                                  Fixed-price date-certain turnkey construction EPC.                                                                                                                      Fixed-price date-certain turnkey construction contract with one or several contractors.                                                                        No or partial fixed-price turnkey contract and/or interfacing issues with multiple contractors.
Completion guarantees                                                                                                                                     The liquidated damages are substantial and are supported by financial substance and/or strong completion guarantee from sponsors with excellent financial standing.                        The liquidated damages are significant and are supported by financial substance and/or completion guarantee from sponsors with good financial standing.                 The liquidated damages are adequate and are supported by financial substance and/or completion guarantee from sponsors with good financial standing.           The liquidated damages are inadequate or not supported by financial substance, or weak completion guarantees.
Track record and financial strength of contractor in constructing similar projects                                                                        Strong.                                                                                                                                                                                    Satisfactory.                                                                                                                                                           Fair.                                                                                                                                                          Weak.
Operating risk
Scope and nature of operations and maintenance (O&M) contracts                                                                                            There is a strong long-term O&M contract, preferably with contractual performance incentives and/or O&M reserve accounts.                                                                  There is a long-term O&M contract and/or O&M reserve accounts.                                                                                                          There is a limited O&M contract or O&M reserve account.                                                                                                        There is no O&M contract. There is a risk of high operational cost overruns beyond mitigants.
Operator's expertise, track record and financial strength                                                                                                 Very strong, or committed technical assistance of the sponsors.                                                                                                                            Strong.                                                                                                                                                                 Acceptable.                                                                                                                                                    Limited/weak, or local operator dependent on local authorities.
Off-take risk
If there is a take-or-pay or fixed-price off-take contract                                                                                                The off-taker has excellent creditworthiness. There are strong termination clauses. The tenor of the contract comfortably exceeds the maturity of the debt.                                The off-taker has good creditworthiness. There are strong termination clauses. The tenor of the contract exceeds the maturity of the debt.                              The off-taker's financial standing is acceptable. There are normal termination clauses. The tenor of the contract generally matches the maturity of the debt.  The off-taker is considered weak and there are weak termination clauses. The tenor of the contract does not exceed the maturity of the debt.
If there is no take-or-pay or fixed-price off-take contract                                                                                               The project produces essential services or a commodity sold widely on a world market. Output can readily be absorbed at projected prices even at lower than historic market growth rates.  The project produces essential services or a commodity sold widely on a regional market that will absorb it at projected prices at historical growth rates.             The commodity is sold on a limited market that may absorb it only at lower than projected prices.                                                              The project output is demanded by only one or a few buyers or is not generally sold on an organised market.
Supply risk
Price, volume and transportation risk of feed-stocks; supplier's track record and financial strength                                                      There is a long-term supply contract with a supplier of excellent financial standing.                                                                                                      There is a long-term supply contract