EMISSION REDUCTION PURCHASE AGREEMENT (ERPA)
Emission Reduction Purchase Agreement Page 1 of 11
Exhibit 10.10
EMISSION REDUCTION PURCHASE AGREEMENT
(ERPA)
between
(the "Purchaser")
ECOLOCAP SOLUTIONS (CANADA) INC (ECOLOCAP).
000 Xx Xxxxxxx xxxxx 000 Xxxxxxxx, XX X0X0X0 Xxxxxx Tel : 0000000000 Fax: 0000000000 Email: xxxxxxxxxxx@xxxxxxxx.xxx
President - CEO: Dr. Tri Xx Xxxxxx
and
(the " BAN XXXXX Hydro Power – CDM Project Proponent”)., henceforth
“VIETNAM PROJECT PROPONENT”
Owner: XXXX XXX HYDRAULIC DEVELOPMENT AND CONSTRUCTION INVESTMENT CORPORATION,
VIET NAM (XXXX XXX HDC., CORP)
Address: No. 3A-430 Alley, Bach Dang St, Xxxxxx Xxxxx Xxxx, Xxxx Xxxx Dist, Ha noi, Viet nam
Telephone: (000) 0 0000000.
Fax : (000) 0 0000000
Mobile: 0000000000 Email:
General Director: Do Xxx Xxxx
Interpretation and Definitions
In this Agreement, unless otherwise required by the context, all capitalized terms shall have the meaning set forth in the definitions below.
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Additional | Means any Certified Emission Reduction (CER) generated by the Project |
Emission | that is in excess of [50,000] Certified Emission Reductions (CERs) per |
Reduction: | annum. |
Agreement: | Means this Emission Reduction Purchase Agreement. |
Annex B Countries: | Means the countries listed in Annex B to the Kyoto Protocol having |
committed themselves to reduce or limit their GHG emissions. | |
Annex I Countries: | Means the parties to the UNFCCC listed in Annex I thereto (Annex I |
consists of industrial countries and countries in transition). | |
Anticipated | Means up to [50,000] Certified Emission Reductions (CERs) per annum |
Emission | during the Crediting Period, anticipated to be generated by the Project |
Reduction: | and calculated in accordance with the Kyoto Rules. |
Baseline: | Means the scenario that reasonably represents the anthropogenic |
emissions of GHG that would occur in the Host Country in the absence of | |
the Project, determined in accordance with the Kyoto Rules. | |
Business Day: | Means a day on which banks are open for general business in Vietnam. |
Carbon Dioxide | Means a metric measure used to compare the emissions of various GHG |
Equivalent: | based upon their global warming potential. |
Certification: | Means the written confirmation by an Operational Entity of an Emission |
Reduction resulting from a CDM project and having passed the | |
Verification procedure according to the Kyoto Rules. | |
Certified Emission | Means a unit of Emission Reduction issued pursuant to Article 12 of the |
Reduction (CER): | Kyoto Protocol and the requirements of the Kyoto Rules (including |
Certification), equal to one metric ton of Carbon Dioxide Equivalent | |
resulting from a CDM project. | |
Clean Development | Means the flexible mechanism established by Article 12 of the Kyoto |
Mechanism (CDM) : | Protocol providing for Annex I Countries to implement projects that reduce |
emissions in non-Annex I Countries in return for CERs and assist the non- | |
Annex I Countries in achieving sustainable development and contributing | |
to the ultimate objective of the UNFCCC. | |
Crediting Period: | Means, until December 31, 2026. |
Emission | Means reduction in emission of GHG achieved, calculated in accordance |
Reduction: | with the Kyoto Rules. |
Executive Board: | Means the international authority elected by the representatives of the |
parties to the Kyoto Protocol responsible for monitoring the CDM process. | |
First Commitment | Means 10th June 2008 until December 31, 2012 . |
Period: | |
Force Majeure: | Means any circumstance or condition beyond the control of either party to |
this Agreement affecting the performance of its obligations under this | |
Agreement including in particular wars, insurrection, natural disaster or | |
equivalent circumstances. | |
Greenhouse Gases | Means the six gases listed in Annex A to the Kyoto Protocol. |
(GHG): | |
Host Country: | Vietnam |
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Kyoto Protocol: | Means the protocol to the UNFCCC adopted at the third conference of the |
parties to the UNFCCC in Kyoto, Japan, on December 11, 1997. | |
Kyoto Rules: | Means the UNFCCC, Kyoto Protocol, the Bonn agreement, the Marrakesh |
Accords, any relevant decisions, guidelines, modalities and procedures | |
made pursuant to them and/or any succeeding international agreements as | |
amended and/or supplemented from time to time and which include those | |
rules specifically required to be met for the issuing and transfer of CERs. | |
Letter of Approval | Means a binding approval of the Project by the Host Country together with |
(LOA): | an approval of the transfer of CERs. |
Monitoring Report: | Means an annual report to be provided by Owner setting out the total |
number of Emission Reductions generated by the Project during the | |
previous year according to the Kyoto Rules, international Monitoring rules | |
and the PDD. | |
Monitoring: | Means the collection and record of data allowing the assessment of |
reductions in GHG emissions resulting from the Project conducted in | |
accordance with the Kyoto Rules. | |
Operational Entity: | Means an independent entity accredited by the Executive Board being the |
executive body for CDM and inter alias responsible for determining | |
whether a project and the resulting Emission Reductions meet the | |
requirements of Article 12 of the Kyoto Protocol. | |
Project Design | Means a detailed description of the Project to be submitted for Validation |
Document (PDD): | prepared in accordance with the Kyoto Rules, the UFG and the Directive |
and attached as Annex III. The Purchaser will be responsible for providing | |
PDD development for Registration of the Project. | |
Project: | Means the proposed CDM project described in the PDD and other |
documents describing the implementation and economics of the Project | |
attached in Annex IV. | |
Registration: | Means the official registration of a CDM project by the Executive Board |
according to the Kyoto Rules. | |
UNFCCC: | Means the United Nations Framework Convention on Climate Change |
adopted in New York on May 9, 1992. | |
Unit Price: | Means the price payable by Purchaser to Project Proponent per Certified |
Emission Reduction (CER) unit: | |
The purchase unit price paid by EcoloCap Solutions Canada Inc. to Viet | |
Nam Project Proponent for the CER is fixed at (12)$US/CER, less | |
applicable tax and sale commission, for the year 2008 to 2012 and a new | |
agreement for purchase unit price will be negotiated for the two periods of | |
extension. | |
The amount paid to the Viet Nam Project Proponent for the total certified | |
CER generated from this project is fixed at (85)% of the total value of CER | |
at this above mentioned purchase price ($(12)US), less commission, | |
applicable tax and the one time reimbursement of an amount of | |
$(75,000)USD to Ecolocap Solutions inc for funding the CDM process. | |
TERM: | |
Ecolocap Solutions inc will purchase certified CER generated by this | |
project for the year 2008 to 2012 with options of extension for two other | |
periods of 7 years, the period 2013-2026, under same terms and | |
conditions. |
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Validation: | Means the assessment of the PDD, including the Baseline, by an |
Operational Entity, determining its compliance with the Kyoto Rules. | |
Verification: | Means the periodic independent review and ex post determination of the |
monitored reductions in GHG emissions that the Project has achieved | |
during a specified period of time by an Operational Entity in accordance | |
with the Kyoto Rules. The project's owner will be Responsible for providing | |
periodical monitoring. | |
Unless otherwise specified, references to clauses are to clauses of this Agreement, references to | |
legal provisions are references to such provisions as in effect from time to time, use of a gender | |
includes any gender and use of the plural includes the singular and vice versa where the context | |
requires. | |
All headings and titles are inserted for convenience only and shall not be deemed part of this | |
Agreement or taken into consideration in its interpretation. | |
1. Preamble | |
The Project is located on the territory of the Host Country. | |
2. | Contractual Obligations |
2.1. | Anticipated Emission Reductions |
2.1.1. | Upon Registration of the Project, Purchaser shall endeavor to implement the Project in |
accordance with the PDD and other documents describing the implementation and | |
economics of the project attached in Annex IV at its own risk and expense. It is hereby | |
acknowledged and agreed between the parties hereto that Purchaser does not warrant | |
the generation of, and is not obliged to generate, any CERs, whether by the Project or | |
otherwise. | |
2.1.2. | If the Project generates CERs, during the crediting period Project Proponent shall, to |
the extent it is legally possible and permissible, exclusively transfer or cause to be | |
transferred to Purchaser all rights (and, to the extent legally possible and permissible, | |
legal title) which Project Proponent may have in the Anticipated Emission Reductions | |
generated during the Crediting Period to Purchaser. | |
2.1.3. | Purchaser shall pay to Project Proponent the Unit Price for each Anticipated Emission |
Reduction generated by the Project and in which the Project Proponent's rights are | |
transferred to Purchaser in accordance with clause 3 below. | |
2.2. | Additional Emission Reductions |
2.2.1. | If Additional Emission Reductions are generated by the Project during the Crediting |
Period, Project Proponent shall offer any Additional Emission Reductions to Purchaser | |
subject to the terms and conditions of this Agreement and at a price per Additional | |
Emission Reduction equal to the Unit Price. If Purchaser does not wishes to exercise | |
the purchase option then Project Proponent may deal with the Additional Emission | |
Reductions as it wishes. | |
2.2.2. | Additional Emission Reductions offer by the Purchaser shall be made as soon as |
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possible after such Additional Emission Reductions have been generated, but no later | |
than December 31 of the year subsequent to the calendar year in which such | |
Additional Emission Reductions have been generated. | |
2.2.3. | Purchaser shall be entitled to accept such offer as a whole or in part and shall notify to |
Project Proponent within one month after receipt of such offer, whether and to what | |
extent it accepts the offer. If Purchaser does not respond within this deadline the offer | |
shall be deemed to be rejected by Purchaser. | |
2.2.4. | To the extent Purchaser accepts the offer, Project Proponent shall, to the extent it is |
legally possible and permissible, transfer or cause to be transferred to Purchaser all | |
rights (and, to the extent legally possible and permissible, legal title) which Project | |
Proponent may have in those Additional Emission Reductions in respect of which | |
Purchaser has accepted such offer, within two months after acceptance of such offer | |
by Purchaser. | |
2.2.5. | To the extent Purchaser rejects such offer of Additional Emission Reductions or such |
offer is deemed rejected by Purchaser, Project Proponent shall be free to enter into | |
contracts with other parties for the sale of such Additional Emission Reductions or to | |
otherwise deal with such Additional Emission Reductions as Project Proponent wishes. | |
2.2.6. | Purchaser shall pay to Project Proponent a price equal to the Unit Price for each |
Additional Emission Reduction in respect of which Purchaser has accepted such offer. | |
2.3. | Emission Reductions generated after the Crediting Period |
If the Project generates any Certified Emission Reductions after the Crediting Period, | |
Purchaser shall enter into negotiations with Project Proponent with a view to | |
concluding an agreement on the purchase of such Certified Emission Reductions | |
based on the principles of this Agreement but amended in order to reflect the | |
international and/or national rules then applicable. | |
3. | Transfer |
Transfer to Purchaser of all the rights (and, to the extent legally possible and | |
permissible, legal title) which Project Proponent may have in a Certified Emission | |
Reduction shall have occurred upon the transfer of a CER from the register of the | |
Executive Board to a register in favor of Purchaser or such other account or register | |
Purchaser has notified to Project Proponent in writing. | |
4. | Payment |
4.1. | Payment for Certified Emission Reductions |
4.1.1. | Payment by Purchaser to Project Proponent for the Certified Emission Reductions (the |
rights in which are transferred pursuant to clause 3) shall be made on the last Business | |
Day of the month in which a 40 Business Day period, starting at the day on which | |
Purchaser has received satisfactory evidence of the transfer as provided for in Clause | |
3, has elapsed. | |
4.1.2. | All payments shall be made to the accounts from time to time be notified to the other |
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party in writing. | |
4.1.3. | All payments shall be made in US Dollars. |
4.1.4. | Subject to clause 4.1.5 below, all taxes, fees, costs or other expenses in connection |
with the generation of CERs by the Project and their Registration and transfer | |
(including VAT in any jurisdiction Purchaser duly notifies Project Proponent to transfer | |
CERs as in Clause 3, if applicable) shall be borne by Project Proponent and purchaser. | |
4.1.5. | The share of the proceeds from CERs generated by the Project to be used to cover |
administrative expenses according to the Kyoto Rules shall be borne by Project | |
Proponent and Purchaser in equal shares. | |
The share of the proceeds from CERs generated by the Project to be used to assist | |
developing countries that are particularly vulnerable to the adverse effects of climate | |
change to meet the costs of adaptation according to the Kyoto Rules shall be borne by | |
Project Proponent and Purchaser in equal shares. | |
5. | Termination and Remedies |
5.1. | Either party (the "Non-defaulting Party") shall be entitled to terminate this Agreement |
by written notice to the other party with immediate effect if any of the following events | |
occurs: | |
5.1.1. | The other party commits a breach of any of its obligations under this Agreement and, in |
the case of a breach capable of being remedied, such breach remains for more than 30 | |
Business Days after it has been requested in writing by the Non-defaulting Party to | |
remedy the breach; or | |
5.1.2. | The other party goes into liquidation (whether voluntary or otherwise), is unable to pay |
its debts as they fall due, is wound up, makes any compromise, composition or other | |
arrangement with its creditors generally, or becomes subject to any administration | |
order. | |
5.2. | Force Majeure |
Should either party be impeded wholly or in part from fulfilling any of its obligations | |
under the Agreement for reasons of Force Majeure, such obligation shall be suspended | |
to the extent and for as long as such obligation is affected by Force Majeure and the | |
impeded party shall be entitled to such extension of time as may be reasonably | |
necessary. | |
Either party shall notify the other party of the existence and date of beginning of an | |
event of Force Majeure that is likely to impede its performance under the Agreement | |
within 5 Business Days after having obtained knowledge of any such event. Either | |
party shall likewise advise the other of the date when such event ended and shall also | |
specify the re-determined time by which the performance of its obligations hereunder is | |
to be completed. | |
Project Proponent and Purchaser shall consult with each other with a view of | |
determining any further appropriate action if a condition of Force Majeure is to continue | |
after 20 Business Days from the date of giving notice thereof. | |
Neither party shall be liable for damages or have the right to terminate this Agreement |
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for any delay in performing hereunder if such delay is caused by Force Majeure; | |
provided, however, that the non-impeded party shall be entitled to terminate such part | |
of the Agreement that remains unfulfilled, if the condition of Force Majeure is to | |
continue after 6 months from the date of giving notice thereof. | |
6. | Change in Circumstances |
If any change in circumstances (i.e. a change of scientific basics or applicable | |
standards relating to the Baseline methodology and/or the applicable criteria for | |
Verification and Certification of the resulting Emission Reductions) occurs which | |
substantially affects the Project, the parties to this Agreement shall enter into | |
negotiations with a view to adapt the Project and its implementation or any relevant | |
provision of this Agreement, as may be necessary or useful. A change in | |
circumstances shall in no event be considered substantially affecting the Project if at | |
least 50% of the Anticipated Emission Reductions can be generated. | |
The parties to this Agreement shall cooperate and make their best efforts to enable the | |
continuation of the Project in accordance with the new circumstances and to achieve | |
the generation and transfer of the Anticipated Emission Reductions. | |
If any of the documents related to the Project and submitted at any time during the term | |
of this Agreement fails to be approved by such authority whose approval is required | |
under the Kyoto Rules or otherwise appears to be non-compliant with any relevant | |
standards or conditions of the Kyoto Rules, Project Proponent and Purchaser shall | |
discuss whether or not the relevant documents are to be revised and resubmitted. | |
7. | Conditions Precedent |
This Agreement shall enter into force upon satisfaction of the following conditions | |
precedent: | |
1. Conclusion of a binding agreement with the Host Country. | |
8. | Miscellaneous |
8.1. | Assignment and subcontracting |
Neither party shall, without the written consent of the other party, assign or transfer the | |
Agreement or the benefits or obligations thereof or any part thereof to any other | |
person. | |
8.2. | Confidentiality and Disclosure |
The parties shall treat as confidential all information obtained as a result of entering | |
into or performing this Agreement which relates to the provisions of this Agreement, the | |
negotiations relating to this Agreement and the subject matter of this Agreement. | |
No party shall disclose any such confidential information to any third party, except in | |
those circumstances where disclosure is required in order to comply with any laws or | |
regulations, including without limitations the Kyoto Rules. | |
8.3. | Notices |
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Any communications to be made under or in connection with this Agreement shall be | |
made in writing (including by facsimile) to the address or facsimile number, from time to | |
time designated by the party to whom the communication is to be made to the other | |
party for that purpose. The address and facsimile number so designated are set out in | |
Annex [I] hereto. A | |
Communication will only be effected, if sent by mail, when delivered to or rejected by | |
the recipient, if sent by facsimile, when a transmission report shows that the facsimile | |
has been sent. | |
8.4. | Entire Agreement |
This Agreement embodies the whole and only agreement of the parties with respect to | |
the subject matter hereof, and no prior or contemporaneous oral or written agreement | |
or understanding shall be deemed to constitute a part of this Agreement, unless | |
expressly referred to herein, or attached hereto, or specifically incorporated by | |
reference herein. The Annexes and schedules to this Agreement constitute integral | |
parts of this Agreement and shall therefore be deemed part of this Agreement. | |
8.5. | Amendments |
This Agreement may only be amended with the written consent of the parties hereto. | |
8.6. | Costs and Expenses |
Each party shall bear its own costs and expenses in relation to the negotiation, | |
preparation, execution and carrying into effect of this Agreement. | |
8.7. | Severability |
If any part or provision of the Agreement is or becomes illegal, void or unenforceable in | |
any respect, the remaining parts or provisions shall not be affected or impaired. Any | |
deficiency in the Agreement resulting there from shall be amended by way of | |
interpretation of the Agreement having due regard to the parties intent. | |
8.8. | Governing law |
This Agreement shall be governed and construed in accordance with English law | |
excluding its rules on conflicts of laws. | |
8.9. | Jurisdiction |
The parties irrevocably submit to the exclusive jurisdiction of the courts having | |
jurisdiction in commercial matters for England with regard to all disputes arising out of | |
or in connection with this Agreement, its violation, termination or nullity. | |
8.10. | Counterparts |
This Agreement shall be executed in two counterparts with one copy for Project | |
Proponent and one for Purchaser. If there are any discrepancies between the English | |
and the Vietnamese version, the English version will prevail. |
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PARTIES TO THE AGREEMENT
WHEREOF the parties have agreed to the terms and conditions of this agreement as outlined above, this 10th day of June 2008, in the presence of:
Purchaser: | |
DR. TRI XX XXXXXX | |
President - CEO : Dr. Tri Xx Xxxxxx | |
Project Proponent: | |
DO XXX XXXX | |
General Director: Do Xxx Xxxx | |
Witness No 1 | Witness No 2 |
XXX XXX XXX XXXXX | LE XXX XXX |
MSc. Xxx Xxx Lan Huong | Le Van Tan-Engineer |
Biology Energy-Waste Treatment | Viet nam |
(Viet nam) Ltd. |
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ANNEX I:
1. The salient features of Ban Xxxxx Hydro Power Project at Xxxx Xxxx Commune, Xxx Xxxx District in Lang son Province, Vietnam.
No | Parameters | Symbols | Units | Value |
1 | Catchment area | F | km2 | 2450 |
2 | Long-term average annual rainfall | Xo | mm | 1350 |
3 | Average flow | Q0 | m3 /s | 45,87 |
4 | Total amount of average annual flow | W0 | 106 m3 | 1446,6 |
5 | Specific runoff | M0 | l/s.km2 | 18,72 |
6 | Normal water level | MNDBT | m | 191,5 |
7 | Dead water level | MNC | m | 190,5 |
8 | Surface area with normal water level | F | Km2 | 2,04 |
9 | Designed head | Htt | m | 17,0 |
10 | Designed discharge | QTK | m3 /s | 77,0 |
11 | Installation capacity | Nlm | MW | 11,0 |
12 | Firm capacity P=85% | Ndb | MW | 0,81 |
13 | Number of unit | z | 2 | |
14 | Estimated Annual Electricity Generation | Eo | 106 kWh | 42,40 |
15 | Estimated Annual Operation Hours | hsd | h | 3855 |
16 | Annual estimation of the emission reduction, tCO2 eq |
CERs | tCO2 eq | 24592 |
17 | Resettlement | person | 20 | |
18 | Compensation (land, tree, farm, property, etc...) | 106USD | 0,437 | |
19 | It is run off river hydropower plant | Yes | ||
20 | New hydropower project with reservoirs having power densities (installed capacity devided by the surface area at full reservoir level) greater than 4 W/m2 . |
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2. Project time schedule.
- Year of 2008: Main work as construction of left side dam will be started in Octorber,
- Year of 2009: construction of right side dam
- Year of 2010: Operation of Unit No 1 and No II.
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ANNEX 2:
Work flow of CDM Activity
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