The requirements for fulfilling the Milestone Requirement by way of Project spend are set out in Condition 4.1(A). This Condition requires the Generator to show evidence that it, and its direct shareholders, have in aggregate spent at least 10% or more of the Total Project Pre-Commissioning Costs on the Project. Therefore, in any given circumstance LCCC will need to be satisfied that at least the 10% minimum threshold amount has indeed been spent on the Project.
LCCC issued a contract amendment to Generators with a CFD for an onshore Generation Technology to confirm that grid connection costs (whether transmission network costs payable to National Grid or distribution network costs payable to a DNO) for onshore technologies may be eligible to count towards the 10% spent, provided that these grid connection costs have been spent and, as with all 10% spent monies, such costs have not been, and would not expected to be, refunded or repaid prior to the Facility being fully operational.
Where a letter of credit is given to National Grid as “security” for grid connection costs, the cost of obtaining the letter of credit (but not the value of the letter of credit) may be eligible to be part of the 10% spent.