Build Transfer Agreements

However, increasing reductions in the cost of installing solar panels and wind turbines and the threat of the removal of federal tax advantages for renewable energy have led to a new opening to supply generation. A series of construction transfer operations – in which the distribution company instructs a third-party project developer to design and build a project and transfer ownership of the distribution company after closing – creates new opportunities and challenges for developers, utility providers and equipment suppliers. A construction transfer contract (BTA) is a hybrid between an acquisition contract and a construction contract. The developer secures land rights, permits, liaison rights and project contracts. If the project is “shovel ready,” the developer (or contractor) builds the project for the utility. In the case of a wind project or other ICT-using projects, the distribution company usually takes possession of the property when the project has been fully tested and commissioned and is starting to operate commercially – or has been commissioned for federal tax purposes. In the case of solar and wind projects using ITCs, ownership transfers are made shortly before commissioning. Then, the project can be operated and maintained by the utility company, the original developer or a third party. Build-operate-transfer (BOT) is a method of project delivery, usually for large infrastructure projects in which a private organization receives a concession from the public sector (or private sector in rare cases) to finance, design, build, own and operate a device specified in the concession contract.

In this way, the project proponent will be able to recover its investment, operating and maintenance costs in the project. Examples of countries using BOT are Pakistan[1] Thailand, Turkey, Taiwan, Bahrain, Saudi Arabia,[2] Israel, India, Iran, Croatia, Japan, China, Vietnam, Malaysia, Philippines, Egypt, Myanmar and some U.S. states (California, Florida, Indiana, Texas and Virginia). However, in some countries, such as Canada, Australia, New Zealand and Nepal,[3] the Build-Own-Operate (BOOT) transfer is used. The first BOT was for the China Hotel, built in 1979 by the Hong Kong-listed conglomerate Hopewell Holdings Ltd (controlled by Sir Gordon Wu). A BOT project is generally used for the development of a discrete asset and not an entire network, and it is generally completely new or in the green meadow (although it is a remediation). Under a BOT project, the project company or operator typically generates revenue through a fee charged to the company or government, not through rates charged to consumers. A number of projects are called concessions, such as toll road projects. B that are under construction and have a number of similarities to THE BOCs. [4] Listen as our panel discusses structuring techniques for the development of renewable energy projects with the help of BTAs, provisions on risk reduction, the impact on construction financing, the potential benefits of tax participation and the removal of regulatory barriers to building transfer transactions. This CLE-Webinar will provide energy consultants with an in-depth analysis of construction transfer agreements (BTAs) for renewable energy projects.