Determine Your Risk Tolerances

At this stage you should begin to determine your company’s risk tolerances with internal legal counsel and other relevant stakeholders. This involves understanding the major types of risks inherent in these transactions and how the risks could potentially be allocated between the buyer and project within the PPA.

• BRC Canada’s term sheet template contains a range of terms that you should consider specifying in a term sheet, together with common variations and indications of what might be considered “market” terms.

• BRC Canada is working on a risk allocation primer describes the major types of risks present in a PPA.

In addition, at this stage you might consider whether it could be appropriate, given your risk appetite, to engage with market makers, banks, or reinsurers that may be able to warehouse certain risks.

Finally, if you have not done so already, this is also when you should engage with external legal counsel.