By Avesh Padayachee, CEO and Marike Wilson CFO at Fibon Energy
Well-crafted contracts are the backbone of successful renewable energy projects.
Whether it’s for a solar system construction, a power purchase agreement (PPA) or any other solar power solution, the agreements we enter into with our partners and clients ensure that both parties are protected and aligned. By combining fairness, practicality and expertise, solutions can be found that work for everyone involved.
Where I work, Fibon, our focus is not only on delivering sustainable energy but also on fostering strong, long-term relationships – be they with customers, engineering, procurement and construction (EPC) partners, subcontractors or suppliers. Let’s take a brief look at two examples.
EPC contracts: the foundation of successful solar projects
An EPC contract is a type of agreement including everything from design and procurement to the installation and commissioning of a solar energy system.
Renewable energy projects, especially solar system construction, often rely on industry-standard contract forms such as:
- NEC4 (New Engineering Contract 4) – a flexible, collaborative contract framework that promotes early risk management
- JBCC (Joint Building Contracts Committee) – common in South African construction, with clear contractual roles for building and infrastructure projects
- FIDIC (Fédération Internationale des Ingénieurs-Conseils/International Federation of Consulting Engineers) – widely used internationally, with strong risk allocation, performance guarantees and dispute resolution mechanisms
Each of these contracts has strengths and limitations, and none fully encapsulates the unique requirements of our projects. We recognise the need for customised contracts, so we have crafted our own EPC agreements by combining the best aspects of each of the standard ones. This ensures our contracts are fair, practical and aligned with both our clients’ and contractors’ needs. This customised approach allows us to handle solar projects efficiently and fairly, assuring our clients of high-quality service, while also maintaining strong relationships with our EPC partners and subcontractors.
PPA contracts: flexibility and fairness in solar energy supply
A PPA (also known as a solar services agreement) is a long-term contract between a solar energy provider and a customer, where the provider designs, installs and maintains a solar system, and the customer agrees to purchase the energy it generates at an agreed-upon rate over a set term.
A good PPA offers flexible and tailored terms and options that meet the diverse needs of specific customers, ensuring it gets the best energy solution for its requirements and budgets.
Because it governs a long-term relationship, a strong PPA goes beyond simply being a contract – it should also prioritise the customer’s experience, and allow for complaints and compliments. This provides an avenue for open communication, ensuring that customers have the opportunity to express any concerns or share positive feedback.
And it’s not just about customers. All parties, including EPC partners, subcontractors and suppliers, are to be treated equitably, creating a stronger, more collaborative energy ecosystem.
Blending legal expertise with a deep understanding of the renewable energy market allows us to create contracts that provide more than just the terms, conditions and parties’ responsibilities. If the project is the body, then the contract its backbone: helping it to stand tall, supporting the head and the heart, the rational and the emotional.
It’s important to remember that contracts are concluded between people, and an enduring, mutually beneficial relationship – even a contractual one – needs both of these elements.