Exhibit 10.30
Protocol of Intention
By and Between
THE MINISTRY FOR FUEL AND ENERGY OF GEORGIA
and
IDM ENERGY CORPORATION
Tbilisi January 20, 1998
The Ministry for Fuel and Energy of Georgia, hereinafter referred to as
Georgian Party or its assignees or designees, and IDM Energy Corporation or its
assignees or designees, hereinafter referred to as Foreign Party, on the other
hand, hereinafter together referred to as the Parties, recognizing the important
role of energy sector for the development of Georgian economy and expressing
their good will to establish long-term cooperation in the field, have agreed
upon the following:
Foreign Party, taking into consideration its resources, shall incur the
corresponding economic and legal expenses, necessary to evaluate the
possibilities of generating and selling electric energy in Georgia. Georgian
Party agrees to conduct the relevant negotiations regarding purchasing of the
electric power generated by Foreign Party. A mutually agreeable Power Purchase
Agreement ( PPA ) between the Parties shall be signed no later than ninety (90)
days after the date of this Protocol of understanding.
The Parties have also expressed the desire to cooperate in the evaluation
of the construction's feasibility of high-voltage transmission lines, with the
purpose to export electric energy to other countries. The optimum capacity,
routing, construction schedule, etc. of such lines shall be determined later by
the Parties and covered by the corresponding agreement as the Parties shall
agree.
The PPA will establish the terms for the sale of electric energy by the
Foreign Party to the Georgian Party from a generating facility or facilities
with a net capacity of up to 1,000 ( one thousand) MW, which will be
constructed, operated and owned by the Foreign Party in Georgia (the
Project(s)).
The initial term of the PPA will be for thirty five (35) years beginning on
the Commercial Operations Date of each plant (which will be defined in the PPA).
The initial term of the PPA may be extended for an additional period of equal
duration at the sole discretion of the Foreign Party.
The PPA will enter into full force and effect on the date of its execution.
The Foreign Party will advise and update the Georgian Party of the construction
schedule for the Projects and the projected Commercial Operation Date.
The Georgian Party will grant to the Foreign Party the required permits for
use of natural resources associated with the Project including, without
limitation, rivers and dams. Where required by law Foreign Party shall pay for
such usage. The direct cost to Foreign Party resulting here from shall be offset
in the then prevailing rate for electrical energy as charged by Foreign Party
for delivery hereof.
The Georgian Party covenants to cooperate with the Foreign Party, its
representatives and affiliates in connection with the financing for the Project.
The PPA will establish that the point of delivery will be located at the
generating facility of the Project. The Georgian Party will be responsible for
the transmission of electric energy from the Project to its facilities.
The Foreign Party will install, operate and maintain the metering system.
The PPA will establish that the Foreign Party shall make available to the
Georgian Party a minimum quantity of electric energy (the Minimum Off- Take
Quantity) during each contract year.
During each contract year, the Georgian Party must accept and pay for the
Minimum Off-Take Quantity. If during each contract year the Georgian Party
accepts an amount of electric energy that is less than the Minimum Off-Take
Quantity, the Georgian Party shall provide for the sale of electric energy to
other buyer( s ), either in Georgia or abroad. The Foreign Party will have the
right to receive payment for any amount of electric energy delivered to the
Georgian Party prior to the Commercial Operations Date at the rate established
in the PPA.
The Georgian Party represents and warrants that the Foreign Party shall
have the irrevocable right of first refusal, but not the obligation, to develop,
on a project-by- project basis for a period of one year from the date
preliminary due diligence is completed and the identified project is verified as
feasible to develop by the Foreign Party. The right to develop individual
projects shall be covered by separate agreements on a project-by-project basis.
Initially, the following projects are mentioned for the purpose of such
identification: Tvishi, Namakhvani, Zhoneti, Zestaponi I, Zestaponi lI,
Zestaponi III, and Rustavi I, Rustavi II.
This Protocol of Intention is and constitutes a legally binding and
enforceable obligation on the part of Foreign Party and Georgian Party. The
Parties agree that Foreign Party shall enter into a PPA with an Assignee (GA) of
the Georgian Party within 90 days of the date of this Protocol. If an agreement
with GA cannot be reached on terms acceptable to Foreign Party then Foreign
Party shall not have any obligations under this Protocol of Intention and shall
in such case have the right to decline the Project. This Protocol of
Understanding does not confer, and shall not be deemed to confer, any rights or
remedies upon any person or entity other than Georgian Party, Foreign Party, and
their permitted successors and assigns.
This Protocol of Understanding does not constitute the entire agreement
between the Parties. Additional details hereof will be defined in the PPA.
Executed in Tbilisi, on January 20, 1998 in English and Georgian languages,
two original copies in each language.
Georgian Party Foreign Party
By: /s/ D. Zubitashvili By: /s/ Xxxxxx Xxxxx
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D. Zubitashvili Xxxxxx Xxxxx
Minister for Fuel President of IDM
and Energy of Georgia Energy Corporation
