In addition to the videos I have included a set of power point slides below that describe the various contracts in project finance along with nuanced and subtle theoretical issues. Examples of issues associated with contracts include:
- The tradeoff between IPP and off-taker costs in designing targets, penalties and incentives for availability and delay liquidated damages;
- Economic distrotions that can occur when contract heat rates are used to dispatch plants and those heat rates are different from actual heat rates that represent the use of resources;
- Problems from incorrectly measuring fixed and variable costs in contracts;
- Distortions in operating a plant when a single-price tariff is applied that covers both capital and operating costs;
- The meaning of indexed tariffs that results in declining real price;
The power point slides can be downloaded below.