A Firming Long Term Energy Service Agreement (LTESA) is a financial derivative contract between an LTES Operator and the SFV. The Firming LTESA provides an LTES Operator with up to ten one-year options to access an annuity payment. An LTES Operator can exercise or not exercise its options, subject to the minimum notice period.
The annuity payment will top up the Project’s Net Operational Revenues if the option is exercised. The annuity payment is capped at the Annuity Cap bid by the Proponent. A repayment mechanism applies in certain circumstances and allows the SFV to recoup some of its previous payments when an LTES Operator earns net revenue beyond a threshold. The repayment is capped at 100% of Historical Net Payments from the SFV to the LTES Operator.