Power Purchase Agreements (PPAs) represent the financial backbone of any energy project in Georgia. This is a long-term contract between an electricity producer (e.g., HPP, solar plant) and a buyer (ESCO, large consumer, or trading partner). A PPA ensures revenue predictability, which is essential for attracting funding from banks and international institutions. With the liberalization of Georgia's energy market, the importance of PPAs has grown even further: whereas previously the state guaranteed energy purchase (PPA with ESCO), producers must now find direct buyers on the free market, sign bilateral agreements, or trade on the exchange. This new reality creates a complex legal environment where every clause of the agreement (price, delivery schedule, balancing responsibility) is critical.
Energy law experts at Legal.ge offer full legal support throughout the PPA lifecycle. Services include:
- Structuring Corporate PPAs: Drafting and negotiating energy supply contracts with large corporate consumers (e.g., data mining centers, factories).
- Ensuring Bankability: Drafting PPA terms to be acceptable to financing banks (so-called Bankable PPA), implying correct risk allocation and protection of termination clauses.
- Managing balancing responsibility: Defining mechanisms for allocating imbalance risks in the contract, which is paramount under new market rules.
- Working with state guarantees: Managing legacy PPAs (where the state has a guaranteed purchase obligation) and legally analyzing amendments to them.
- Dispute resolution: Representation in arbitration or court if the buyer violates payment deadlines or refuses to accept energy citing "force majeure."
The relevance of PPAs is evident in the following real-world scenarios:
- A foreign investor builds a solar power plant and needs a 10-year energy sales contract to secure a loan from a development bank. A lawyer helps them sign a corporate PPA with a large local enterprise.
- A hydropower plant moves to the free market and needs to sign a contract with a trader company that will export its energy to Turkey.
- A large consumer (factory) seeks cheap and green energy and wants to sign a direct contract with a producer, bypassing the distribution network margin.
- The government changes market rules, affecting existing guaranteed PPAs. An investor needs a legal opinion on how protected their price is against changes ("stabilization clause").
The field is regulated by the Law of Georgia on Energy and Water Supply and the Electricity Market Rules. PPA standards also stem from EU energy legislation. Regarding state-guaranteed purchases, government decrees on "Measures for Promoting Energy Projects" apply. Private PPAs are based on contract law principles of the Civil Code but must strictly adhere to the technical regulations of the Market Operator (ESCO) and Transmission System Operator (GSE).
Collaborating with a Legal.ge specialist is the best way to protect your revenue. The energy market is dynamic and risky; an incorrectly drafted PPA can lead to millions in losses due to imbalance penalties or exchange rate fluctuations. An experienced lawyer ensures that the agreement is flexible, secure, and financially beneficial.
Find PPA experts on Legal.ge. Our platform brings together lawyers with experience in international energy transactions. Turn your generation into stable revenue with the right legal partnership.
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