You are on page 1of 8

Page 1 of 8

Consultancy agreement and term sheet


Agreement of consultancy between
M/s ABCD Developers (hence forth referred as the developer) represented by
Mr. XXX Managing Director and
M/s Consultant (hence forth referred as the consultant) represented by
Mr. YYY-Managing Director
Both the parties entered in to agreement on this day of ------------------2015.
The following few points are agreed between the developer and the consultant.
This agreement contains a total of-8-.pages numbered from 1 to 8 including this page.

Summary of agreement
A. The developer is in the business of setting up a solar photovoltaic (SPV) technology
based power plants.
B. The consultant is in the business of arranging EPC contractors with differed credit facility
for solar photovoltaic power generating plants developers.
C. The developer agreed to engage the consultant for identifying a suitable EPC
contractor who offers differed credit facility, for their upcoming solar PV power projects.
Summary of the project
Location
Latitude
Longitude
Solar radiation

----- (village), ------ (District), ------ (State).

End consumer

DISCOM / Third party sale /


Captive own consumption
---MW AC with crystalline silicon technology
17,50,000 Units (subject to final survey)
6-7 months from signing EPC contract.

Plant capacity
Minimum target generation
Total time required for execution

KWh/Sq. Mt/Day

Page 2 of 8

Part 1: Consultancy terms.


A. The consultant shall do the all required liasoning work in obtaining all the all relevant
approvals from the relevant government departments to setup the solar PV power plant.
B. The developer shall pay all the statutory duties, fees and incidental charges required in
obtaining the permissions, including right of way for the evacuation line.
C. The developer shall give all the relevant documents and sign all the required formats,
documents and give all the required declarations from time to time to the consultant for
a speedy processing.
D. The token liasoning fee for the above work is Rs.
E. The consultant at his cost shall identify an EPC contractor and funding agency
as per the comfort of the developer.
F. Commitment of developer: Once the developer approves all the terms of the EPC
contractor and funding agency, the developer recognizing the efforts put by the
consultant,and he promises to enter into agreement with the respective agency without
retracting.
G. If due to any circumstances including standard force major circumstances, if the
developer cannot take up the project, after sanction letter of loan, in such a case the
developer agrees to pay an amount of Rs 10,00,000 (Rupees Ten Lakhs only) as
reimbursement of the expenses incurred by the consultant.
H. Time period for identifying the EPC contractor and funding agency:
The EPC contractor and financier should be identified and the agreements should be
arranged to be concluded within 30 days from the date of signing of this agreement.

Page 3 of 8

I. Non circumventing and Non-disclosing clause:


Bothe the developer and consultant under oath promises to each other tha they
abide by the below non-circumventing and non- disclosing terms.
1.Bothe the parties recognize the efforts put by the other party in developing the
respective businesses in terms of time, money and good will and reputation at stake in
the society.
2. The developer recognizes the efforts put by consultant in identifying the EPC
contractor and funding source in terms of money and time.
3. The consultant recognizes the efforts put by the developer in identifying and
developing a power purchaser and importance of the confidentiality of the end customer
and PPA terms.
4. The developer agrees that all the information and contacts shared with him including
the details of the EPC contractor, funding agency, terms of EPC, terms of finance, costs
of equipment and services are proprietary information of the consultant which the
consultant developed with much effort.
5. The developer hence agrees not to circumvent the consultant and approach the EPC
contractor and funding agency not only for this project and for the future projects
envisaged by the developer as it hampers the business of the consultant and causes
huge financial loss to the consultant.
6. The developer agrees to not to disclose the EPC contractor details and funding
agency details to any other party, as it will hamper the future business prospects of the
consultant and causes financial loss to the consultant.
7. The developer agrees to not to disclose the finance terms and EPC terms to any
other party, as it will hamper the future business prospects of the consultant and also of
the funding agency and of the EPC contractor identified by the consultant.
8. The consultant agrees to not to disclose any information like regarding the end
customer, PPA terms, about the developers organization, the project, end customers
information made available to the consultant, and any such information which is
sensitive to the developers organization and to his end customer as it may cause huge
loss to the developer and his end client in terms of finance and market good will which
cannot be valued in terms of money.
9. The information shall mean any written information in the form of records, charts,
drawings, memoranda and any such data not limiting to the forms mentioned here
which constitutes information in any form other than verbal communication.
10. Both the parties are responsible to hold information secret and confidential. They
shall instruct their respective employees to whom they may need to disclose the
confidential information to keep it confidential. The onus of maintaining the
confidentiality and secrecy rests with the respective organizations.
11. Both the parties indemnify the other party if the other party requires disclosing the
information under an act of law, government enquiry and /or statutory disclosure
requirement.

Page 4 of 8

12. Up on the breach of the NCND terms and submitting proof of the same the other
party shall take the legal route or through arbitration shall claim such an amount of
Rs 10,00,000 (Rupees Ten lakhs only) as a token reimbursement of invaluable
loss caused.
J. Validity of the agreement period: This agreement shall be in force for a time period of
2 years from the date of signing as far as the non-disclosure terms are concerned.
K. Jurisdiction: Hyderabad city of Telangana state shall be the jurisdiction for this
agreement.

Part 2: LSTK EPC funding terms:

Page 5 of 8

A. The following are the basic terms under which the EPC deferred credit provider is
arranged by the consultant.
B. This part forms the basis for the term sheet or preliminary agreement between
the developer and the EPC cum deferred credit provider at later date once
identified.
EPC contract
size

---MW AC with single axis tracker system

Type of plant

DISCOM / Third party sale /


Captive own consumption

EPC implementation in
India by

Differed EPC credit provider or their associate company

Minimum KWH units


generation target.

Units17.50 Lakhs/MWp (Subject to site study)

Power Tariff as per the PPA Rs_________


entered by the developer
with the buyer
Credit period

7 Years (84 monthly installments) (Subject to final discussions


with the EPC credit provider)

Land and evacuation line

Client Scope

Project EPC cost


considered

Subject to discussion. Quoted cost shall include credit insurance


for entire loan period.

Advance investment for the 30% of the agreed EPC cost.


project by developer
Credit amount

Balance 70% of agreed EPC cost. will be disbursed and


collected in rupee terms.

Loan details

Currency and deferred credit amount to be paid subject to


negotiations. (Term of currency subject to discussion after
signing the preliminary term sheet with EPC credit provider.

Taxes and duties

As applicable

$cost considered:
EPC cost estimate is based on quotes for Module and Inverter as of today.

Page 6 of 8

Flow of activities
1. Initiation of project by signing the Term Sheet with EPC contractor. Negotiation
and finalization of terms.
2. Formal agreement between client and EPC credit provider along with lump sum
token advance.
2.1. The advance shall be adjusted towards mobilization.
2.2. We shall give a security against the token advance taken valid till
obtaining the sanctions from the lender and supplier
3. After the agreement and payment of token advance work will begin for
3.1. Soil testing, water testing, cantor study, estimation of evacuation line,
preparation of DPR, and validation of the PPA.
3.2. Getting in principle loan sanction letter from the lender,
3.3. Suppliers credit sanction letter from suppliers.
4. After getting the in-principle loan sanction and suppliers credit sanction letter
4.1. The initial token advance will be adjusted against Mobilization.(nonrefundable if the project stopped at the instance of developer at this
stage),
4.2. The site shall be handed over to the EPC contractor after basic jungle
clearance and levelling.
4.3. The balance of the advance amount should be paid to the EPC contractor.
(here the advance means the 30% agreed investment by the developer)
4.4.

After receiving the final installment of the balance advance the work shall
be started on the site.

Note:
Final Supplier credit Sanction will be given only after the developer obtains all the
statutory, local and central government clearances including approval (NOC) for land
that can be used for commercial purpose and land conversion, permission from
DISCOM for evacuation to the nearest 33/13210KVA substation including where it is
required right of way for the evacuation and environmental clearance.
5. All the above process will take about 30 to 45 days depending on the clients
support.
6. Project implementation will begin and be executed as per the agreed terms.
7. The whole process will be completed within 6-7 months after the final credit
sanction, payment of balance of 30% advance, and site handover to the EPC
contractor whichever is the last.

8. The CEIG approval process is the responsibility of the developer.

Page 7 of 8

The EPC contractor will assist in the inspection process and, shall rectify any
comments made by the inspector subject to the terms and conditions in the EPC
agreement at EPC contractors cost.
EPC contractor shall not be held responsible for the comments made by the
inspector which are not covered in the EPC agreement and which are beyond
statutory requirement.
9. Differed credit repayment.
The repayment will be in 7 years (84 monthly installments) by way of
assignment of PPA monthly installments. Addition to this the plant shall be
provided as security to the differed credit provider, and differed credit
provider, himself or through authorized entity shall have the first lean on
the account in which the PPA bills are received.
Any additional terms are subject to discussion and negotiation.
The payment terms for the project:
Milestone

Percentage of total contract

Initial token advance to be adjusted


Rs.20 Lakhs lump sum for obtaining in-principle
against Mobilization after the disbursal of approval from lender and suppliers, preparation
the first tranche of loan.
of DPR and detailed costing for the specific
(Once final agreement is signed the token site.
advance has to be paid.
The EPC credit provider can give
a security to the advance taken.
Advance upon receipt of credit approval

Rs.30% of EPC cost

Repayment

7 years (84 monthly) installments in agreed


currency amount directly assigned from the
PPA providers payments along with revolving
BG/LC

Security

Plant shall be given as security and credit


provider shall have the first lean on the
receivables account.

10. Owner scope of the project: The following activities are under the scope of the
project developer.
10.1. Obtaining all the relevant approval required for setting up of project.
10.2. All the statutory, local and central government clearances including
tax & duty exemptions and any other clearances.
10.3. Evacuation clearance from DISCOM/TRANSCO, obtaining right of way
and environmental clearance for evacuation line where it is required.

Page 8 of 8

10.4. Levelling of land, fencing the boundaries, providing security,


laying the approach roads, providing internal lights,
providing water and power at site.
If the above listed are to be done by the EPC contractor the costs will be
separately quoted at extra.
10.5. All costs associated with the above and insurance cost from the EPC work
commissioning date.

Action to be initiated
To initiate the process as a token of acceptance of the terms and conditions and a Letter of
Intent shall be given from the developer side along with signing this consultancy agreement
and term sheet.
After obtaining the Letter of Intent from the developer the consultant through the identified
EPC differed credit provider shall begin the action for
a. Preparation of detailed financial calculations,
b. Submitting preliminary list of equipment.
c. Preliminary site study and generation estimation.
d. Preparation of detailed agreement.
Thanking You
For M/s ABCD DEVELOPER
Authorized Signatory
Mr. XXX
We have understood and accept to the above terms to initiate the process.
For M/s CONSULTANT
Authorized signatory.
Mr. YYY
1-Witness 1:___________________________
Name:
2-Witness 2:___________________________
Name: