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Electricity Regulation Act, 2006 (Act No. 4 of 2006)


Regulatory Rules for Power Purchase Cost Recovery

6. Balanced risk allocation


Risk allocation and transfer is an essential component of a PPA.


PPAs will be assessed in regard to the principle of efficient risk transfer - whereby the party best able to manage specific risks is allocated those risks. NERSA will assess the transfer of specific risks defined in PPAs to ensure this principle is met.


It is advised that the parties to an agreement should engage with NERSA in regard to key aspects of a PPA at the early stage of project development to ensure that the design of a PPA is in accordance with appropriate principles of risk transfer and parameters are set.