Tazabek – The Regulation on the procedure for ensuring the guaranteed purchase of electricity generated by renewable energy facilities within the framework of investment agreements on the implementation of projects for the construction and operation of renewable energy facilities has been approved. This is stated in the Resolution of the Cabinet of Ministers dated February 14.
The funds allocated by the Ministry of Finance must be used by the Green Energy Fund and JSC NESK strictly for their intended purpose to pay for purchased electrical energy under electricity supply contracts.
within the framework of investment agreements on the implementation of projects for the construction and operation of renewable energy facilities in the event of non-payment for supplied electricity from the own funds of JSC NESK.
The Ministry of Energy is instructed to:
1) jointly with the Green Energy Fund, develop and submit for consideration to the Cabinet of Ministers of the Kyrgyz Republic draft regulatory legal acts.
2) systematically conclude investment agreements based on data provided by JSC NESK, taking into account the capabilities and needs for electricity.
The Green Energy Fund, together with JSC NESK, has been instructed to develop and approve a form of agreement on the relationship between the Green Energy Fund and JSC NESK on the payment of the amount of the purchase of electricity in the event of non-payment for the supplied electricity from the own funds of JSC NESK within the framework of the implementation of this resolution.
JSC NESK recommended:
when forming the budget, prioritize funds for expenses on the purchase of electricity and those not subject to reduction;
systematically conclude contracts for the supply of electrical energy, taking into account the capabilities and needs for electrical energy.
The funds received into the account of JSC NESK are used strictly for payment of the supplied electricity generated by renewable energy facilities within the framework of investment agreements, and the used guaranteed buyout funds are subject to replenishment by JSC NESK.
Regulation on the procedure for ensuring the guaranteed purchase of electric energy generated by renewable energy facilities within the framework of investment agreements on the implementation of projects for the construction and operation of renewable energy facilities
Chapter 1. General Provisions
1. The Regulation on the procedure for ensuring the guaranteed purchase of electric energy generated by renewable energy facilities within the framework of investment agreements on the implementation of projects for the construction and operation of renewable energy facilities (hereinafter referred to as the Regulation) defines the procedure for ensuring the guaranteed purchase of electric energy generated at renewable energy facilities (hereinafter referred to as RES) within the framework of investment agreements on the implementation of projects for the construction and operation of renewable energy facilities.
2. Basic concepts used in these Regulations:
investment agreement – an investment agreement on the implementation of projects for the construction and operation of renewable energy facilities, concluded in accordance with the legislation of the Kyrgyz Republic;
guaranteed buyback – an obligation of the Green Energy Fund under the Cabinet of Ministers of the Kyrgyz Republic (hereinafter referred to as the Green Energy Fund) to ensure the obligations stipulated by the contract for the supply of renewable energy facilities to pay for electricity using funds allocated from the republican budget;
Open Joint-Stock Company “National Electric Grid of Kyrgyzstan” (hereinafter referred to as OJSC “NESK”) – an electric power company determined by the authorized state body, purchasing electricity generated by renewable energy facilities;
loan agreement – an agreement concluded between a credit institution (bank) and an investor and/or a renewable energy entity.
Chapter 2. Conditions and procedure for providing a guarantee for the purchase of electric energy
3. In order to conclude an agreement on the guaranteed purchase of electric energy, in accordance with the appendix to this regulation, investors must meet the following criteria:
1) the existence of an investment agreement concluded between the Cabinet of Ministers of the Kyrgyz Republic and the investor on the implementation of projects for the construction and operation of renewable energy facilities, which has entered into force in accordance with the procedure established by law;
2) carry out activities to implement similar investment projects, while having at least two successfully implemented similar projects. The total cost of successfully implemented projects must be no less than the amount of the investment project;
3) have a recognized international business reputation, unique knowledge in a similar field of activity, or provide a letter of guarantee on behalf of such an organization if the legal entity has been in operation for less than three years;
4) not be registered and not operate in states and territories that provide preferential tax treatment and/or do not provide for full disclosure and presentation of information (offshore zones);
5) the investor is not subject to any claims, legal proceedings, investigations or threats of such actions by any court, tribunal or government agency that, individually or in the aggregate, could lead to any significant adverse effect on its business, assets, financial or other position or to the weakening of its ability to fulfill its obligations, and the investor is not aware of any violation or failure to comply with any orders, rulings, orders or injunctions by any court, tribunal or government agency that could lead to any such significant adverse effect or weakening;
6) the funds for the implementation of the investment project are not criminal proceeds or are not related to the legalization (laundering) of criminal proceeds and the financing of terrorist activities, high-risk jurisdictions and sanctions lists, and officials and any other persons acting on behalf of the investor were not involved in activities related to the legalization (laundering) of criminal proceeds and the financing of terrorist activities;
7) the investor must confirm the sources of financing for the project in accordance with the legislation of the Kyrgyz Republic by providing a financial model of the project;
8) the investor and/or renewable energy entity must not have overdue debts for the payment of taxes, fees and other payments to budgets of any level at the place of registration as a legal entity and at the place of implementation of the investment project;
9) the investor and/or the renewable energy entity must not have any overdue debt on the repayment and servicing of previously received loans, the payment terms for which have arrived, as well as other overdue debt to creditors at the place of registration as a legal entity and at the place of implementation of the investment project.
4. The guaranteed buyout is provided for the term of the loan agreement concluded between the lender and the investor and/or the renewable energy source entity within the framework of the implementation of the project for the construction and operation of renewable energy sources facilities.
5. To conclude an agreement on the guaranteed purchase of electric energy, the investor and/or renewable energy entity must provide the following documents to the Green Energy Fund:
1) a statement of intent to enter into an agreement on the guaranteed purchase of electrical energy;
2) notarized copies of the state registration certificate and constituent documents of the legal entity;
3) documents confirming the right to the land plot and feasibility study;
4) a certificate from the tax authorities at the place of tax registration of the legal entity on the absence of arrears in the payment of taxes, fees and other payments to budgets of any level;
5) a certificate from commercial banks servicing the legal entity’s accounts on the turnover on the current account over the last six months;
6) financial statements for the last three years and an independent auditor’s report for the last three years. If none, for the last reporting period;
7) information on all existing debt (copies of agreements, contracts and relevant documentation);
8) confirmation of sources of financing for the implementation of the investment project and investment of own funds of at least 20%;
9) the existence of a concluded agreement (contract) for the supply of electric energy by a renewable energy facility with a capacity of over 30 MW;
10) a supporting document in the form of a bank guarantee in the amount of 2% of the planned investment amount in the project before the commissioning of the renewable energy facility.
6. After all documents specified in paragraph 5 of this Regulation have been submitted, within 14 working days the Green Energy Fund shall consider the issue of concluding an agreement on the guaranteed purchase of electrical energy.
7. After approval of the application, the Green Energy Fund sends a letter of consent to the investor and/or renewable energy entity regarding the intention to enter into an agreement on the guaranteed purchase of electrical energy if the investor and/or renewable energy entity has a loan agreement.
In the event that the investor and/or the renewable energy entity have a loan agreement, the Green Energy Fund and JSC NESK, together with the Investor, conclude a tripartite Agreement on the guaranteed purchase of electrical energy.
8. The agreement on the guaranteed purchase of electrical energy shall enter into force from the moment the renewable energy facility is put into operation.
9. Failure of the investor to meet the established criteria and incomplete provision of documents stipulated in paragraph 5 of this Regulation shall be grounds for refusal to conclude an agreement on the guaranteed purchase of electric energy by the Green Energy Fund.
10. In the event that the Cabinet of Ministers of the Kyrgyz Republic provides an investor and/or a renewable energy source entity with a guarantee for investments within the framework of an investment agreement on the implementation of projects for the construction and operation of renewable energy sources facilities, an application for the intention to conclude an agreement on the guaranteed purchase of electrical energy will not be considered.
11. Improper fulfillment by the Investor and/or the renewable energy entity of obligations under the investment agreement and the electricity supply agreement or violation of the legislation of the Kyrgyz Republic shall be grounds for cancellation of the agreement on the guaranteed purchase of electricity.
Chapter 3. Procedure for providing guaranteed buyout of electricity
12. In the event of a justified impossibility of full payment for the supplied electricity from its own funds, JSC NESK applies to the Green Energy Fund for the allocation of funds to pay for the purchase of electricity, providing the necessary calculations and supporting documents.
13. The Green Energy Fund shall review the received documents within 10 working days and, if approved, shall send an application for consideration of the issue of financing to the Ministry of Energy of the Kyrgyz Republic and the Ministry of Finance of the Kyrgyz Republic with the amount of financing.
14. In order to allocate financial resources, the Ministry of Energy of the Kyrgyz Republic, together with the Green Energy Fund, initiates a draft of the relevant decision of the Cabinet of Ministers of the Kyrgyz Republic on the allocation of financial resources to the Green Energy Fund.
15. After the Cabinet of Ministers of the Kyrgyz Republic has adopted the relevant decision, funds are allocated from the republican budget in accordance with the established procedure to the Green Energy Fund to pay the amount of the purchase of electricity from the renewable energy entity.
16. After receiving funds from the Green Energy Fund, JSC NESK transfers them to the investor and/or renewable energy entity to pay for the amount of electricity purchase.
17. The funds used for the guaranteed purchase of electricity must be replenished by JSC NESK within 3 (three) months from proceeds from the sale of electricity.
18. The funds allocated by JSC NESK are used strictly for their intended purpose – to pay for purchased electrical energy within the framework of investment agreements on the implementation of projects for the construction and operation of renewable energy facilities.
Chapter 4. Monitoring Compliance
19. The Ministry of Energy of the Kyrgyz Republic, responsible for the implementation of the investment project, exercises control over the fulfillment of obligations, the terms of concluded investment agreements and the implementation of the investment project.
20. The Green Energy Fund monitors compliance with the terms of the agreement on the guaranteed purchase of electric energy.
21. The investor and/or the renewable energy entity is obliged to regularly provide the Ministry of Energy of the Kyrgyz Republic with reports on the progress of the project, including information on the funds raised, their use and the status of the project implementation.
22. In the event of non-compliance between the actual implementation of the project and the declared and agreed conditions, as well as a violation by the investor and/or the renewable energy entity of the assumed obligations, the agreement on the guaranteed purchase of electrical energy shall cease to be effective.
23. To monitor the progress of the project, the investor and/or the renewable energy entity must engage an independent auditor.
Chapter 5. Responsibility of state bodies, investor and/or renewable energy subject
24. Ministry of Energy of the Kyrgyz Republic:
– carries out an assessment of the implementation of investment projects and subsequently monitors their implementation in accordance with the legislation of the Kyrgyz Republic;
– maintains records of investment agreements concluded by the Cabinet of Ministers of the Kyrgyz Republic on the implementation of projects for the construction and operation of renewable energy facilities.
In the event that the investor and/or the renewable energy subject fails to provide data on the targeted use of funds raised on the basis of investment agreements on the implementation of projects for the construction and operation of renewable energy facilities, within 10 (ten) working days, the Ministry of Energy of the Kyrgyz Republic shall send a notification to the Green Energy Fund on the initiation of termination of the agreement on the guaranteed purchase of electric energy.
25. Responsibility for the accuracy and completeness of the information and documents provided rests with the investor and/or renewable energy entity that has made the proposal to conclude an agreement on the guaranteed purchase of electrical energy.
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