Capacity Building on Design of Bankable Power Purchase Agreements in West Africa

Power Purchase Agreements (PPAs) are long-term contracts between sellers and buyers of electricity, defining each parties’ rights and responsibilities, and defining mechanisms for dispute resolution. As these agreements lay out the contractual basis for risk allocation between the parties and represent risk hedging instruments for the seller, well-designed PPAs are key to ensure the bankability of generation projects and therefore, to enable their deployment.

The International Renewable Energy Agency (IRENA) in collaboration with the ECOWAS Centre for Renewable Energy and Energy Efficiency (ECREEE), the West African Power Pool (WAPP), the ECOWAS Regional Electricity Regulatory Authority (ERERA) and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH organised a capacity building programme on the design of bankable renewable energy power purchase agreements (PPAs) for ECOWAS Member States.

The main objective of this capacity building programme was to enhance the capabilities of ministries, regulators and utilities to design bankable contracts and ensure effective commitment of private capital to the deployment of renewable energy projects in West Africa. The training contributed to the operationalisation of a regional electricity market as part of the implementation of the West Africa Clean Energy Corridor, which IRENA and the regional bodies initiated back in 2016 and which got the Heads of State endorsement in 2017.