Bank Guarantee
There are a number of instances where SA Power Networks will request a Bank Guarantee. The purpose of this page is to provide further information on the Bank Guarantee process including the sample wording that can be used.
When is a bank guarantee required?
Bank Guarantees are required under the following scenarios:
The performance bond can be established in several ways as detailed in our Network Information for Customers and Contractors 401 document (NICC 401)
SA Power Networks Constructions Terms 3302 which forms part of your offer acceptance, details the need to provide this financial guarantee. The Performance Bond shall be established in the form of a financial guarantee, from a recognised financial institution. The guarantee must be unconditional and in a form that is acceptable to SA Power Networks. It can be established by either the applicant or the contractor. The guarantee will be held by SA Power Networks for a period of two (2) years which reflects the defect liability period.
SA Power Networks may provide notification to Council that our requirements have been met for this project prior to all the conditions in the “Construction Terms (Non-Contestable & Contestable) 3302” and the SA Power Networks Offer being satisfied after consideration of the following:
- SA Power Networks easement requirements for the development are shown on the final plan.
- SA Power Networks receipt of your signed acceptance form, part 2 from our offer letter.
- SA Power Networks receipt of your Initial or Full Payment (20% or 100% Non Contestable works only).
- A Bank Guarantee in a form suitable to SA Power Networks has been lodged with us that represents the following:
- Applicants’ contribution for the Works; including civil works.
- All other SA Power Networks costs associated with connection that are the responsibility of the applicant.
What does the guarantee need to say?
The guarantee must be from a recognised financial institution, must be unconditional and in a form acceptable to SA Power Networks (see the sample). It must include:
- Location of the project, including development number or
- In the case of multiple projects at multiple development locations it must be worded as “Security for all or any amounts payable now or in the future to SA Power Networks or any other contractor for the installation of the Works, including Electrical Works.”
How do I know what the value needs to be?
The value of the guarantee will be specified in the Connection Offer provided by the SA Power Networks’ Project Manager.
What is the purpose of the bank guarantee?
The purpose of the performance bond is to secure the performance of the Customer’s obligations during the defect’s liability period. If the Customer fails to perform any of those obligations in any respect, SA Power Networks may call on the bond at any time and without notice or reference to the Customer and use the proceeds of the bond to reimburse SA Power Networks for the costs of remedying the Customer’s failure to comply with those obligations.
Anything else I need to know?
SA Power Networks reserves the right to review the value of the Bank Guarantee if construction has not commenced within 120 days of the offer letter being signed.