PPA deadline looms, Anastasio calls for Senate decision
With December deadline looming for approval of the amended and restated Power Purchase Agreement (PPA) between Palau Public Utilities Corporation (PPUC) and Engie Eps, House Speaker Sabino Anastacio calls for a decisive action by the Senate.
“Vote yes or no to the PPA, so that we can either stop or move forward,” he says of the Senate action calling for further study of the PPA. “Holding on to this is not a decision. Either say yes if you want it or no, and provide your solution to Palau’s energy needs instead of sitting on it, which is not an action,” insists Speaker Anastacio at the press conference held on this Wednesday.
President Remengesau Jr. in more cautious tone says that the process is moving forward. He says the Senate had requested independent study by Asian Development Bank and hopes that response from the bank can be issued quickly.
Remengesau says that they have requested for extensions a number of times from Engie to allow for OEK’s issues with the contract to be addressed, however he says, that as a company, Engie will not wait for Palau indefinitely. “This company does not do business with Palau only and will move on to invest their $80 million elsewhere.”
Speaker Anastacio also refuted criticisms voiced of the House of Delegates “very quick” review of the contract, insisting the House has done it due diligence in reviewing and analyzing all the studies and documents pertaining to the contract including having their attorney provide a legal summary of the project.
In addition, Remengesau reports that the process has not been quick, and that there were exchanges of drafts and number of presentations of the project proposal with national leadership before the execution of the contract.
The contract executed between PPUC and Engie, will have Engie develop, plan, engineer, finance, build, commission, operate and maintain a solar powered power plant and PPUC will buy electricity from Engie for 30 years at specific rates.
In the contract, Palau government will guarantee payment of PPUC’s to Engie should PPUC defaults on its contract payment. Furthermore, Palau will provide Sovereign Immunity, enabling Palau to be sued in order to collect payment of debt obligations if PPUC fails to pay for the power it takes from Engie.
Senate continues to question the set rates in the contract stating that the rate in the contract should be lower. In addition, it continues to believe that a law is required to approve the contract rather than just the resolution. It had officially requested assistance of Asian Development Bank to review the contract and provide their recommendation on the project.
Deadline to approve the contract is said to be December 8, 2018, little over a week from today.