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The Power Sale Agreement (PSA) is a fundamental document in Malaysia's energy sector, used to establish the legal and commercial framework for power supply arrangements between generators and purchasers. This agreement is essential for independent power producers, utility companies, and large industrial consumers operating in Malaysia. The PSA must comply with Malaysian regulations, particularly the Electricity Supply Act 1990 and Energy Commission requirements. It typically includes detailed provisions for power capacity, availability, pricing mechanisms, technical specifications, and operational procedures. The agreement is crucial for project financing in the power sector and often serves as a key document for securing investments. The Malaysian jurisdiction requires specific considerations regarding grid connectivity, renewable energy integration (if applicable), and environmental compliance.

1. Parties: Identification of the power producer/seller and the power purchaser with their full legal details

2. Background: Context of the agreement, including facility details and purpose of the power sale arrangement

3. Definitions and Interpretation: Comprehensive definitions of terms used throughout the agreement and rules of interpretation

4. Sale and Purchase Obligations: Core obligations regarding the sale and purchase of power, including minimum take-or-pay provisions

5. Term and Effectiveness: Duration of the agreement, conditions precedent, and effectiveness requirements

6. Facility Requirements: Technical specifications and operational requirements for the power generation facility

7. Metering and Testing: Requirements for power measurement, testing procedures, and meter maintenance

8. Billing and Payment: Payment terms, invoicing procedures, and dispute resolution for payments

9. Performance Security: Requirements for performance bonds or other security arrangements

10. Force Majeure: Definition of force majeure events and their consequences

11. Representations and Warranties: Standard and specific warranties from both parties

12. Liability and Indemnification: Allocation of risks and responsibilities between parties

13. Insurance: Required insurance coverage for both parties

14. Default and Termination: Events of default, cure periods, and termination procedures

15. Dispute Resolution: Procedures for resolving disputes, including arbitration provisions

16. Governing Law: Application of Malaysian law and jurisdiction

17. Miscellaneous: Standard boilerplate provisions including notices, amendments, and assignments