TRENDS IN FIDIC CONTRACTS IN RENEWABLE ENERGY AND THEIR RELATIONSHIP TO LOCAL INVESTMENT DESIGN, CONSTRUCTION AND REFURBISHMENT
Abstract
The study aims to analyze FIDIC proformas in renewable energy projects and their role in investment planning, construction and rehabilitation at the local level. The relevance of the topic is determined by the growing global demand for standardized contractual solutions in the field of sustainable energy infrastructure development, ensuring financial transparency, risk management and regulatory compliance. The growing need for green procurement and attracting international investment further emphasizes the importance of FIDIC contracts in reducing legal, economic and technical risks in renewable energy projects. The research methodology is based on systems analysis, comparative assessment and risk assessment methods. The study examines the legal, financial, environmental and technical factors that influence the adaptation of FIDIC contract forms to different regulatory environments. The study also includes a structural and functional analysis to determine how the FIDIC framework improves contract transparency, risk allocation and dispute resolution in renewable energy development. The study results show that FIDIC contracts significantly increase investment attractiveness by providing clear contractual obligations, standardized risk-sharing mechanisms and effective dispute resolution procedures. The study identifies key barriers to implementation, such as legal discrepancies between international and national standards, challenges in adapting contracts to local conditions and complex financial structures. The results show that successful cases of FIDIC contracts demonstrate their effectiveness in ensuring project stability, minimizing litigation and facilitating smooth cooperation between stakeholders. In addition, the integration of digital tools such as BIM and smart contracts contributes to contract efficiency and real-time project monitoring. The practical value of the study lies in its contribution to optimizing contract management strategies in renewable energy projects, particularly in the context of municipal infrastructure on the basis of public-private partnerships. The findings can be used by developers, investors and policymakers to improve project planning, financial management and compliance with sustainability requirements. The study also provides insights into future trends in contract standardization, the impact of ESG on contractual frameworks and the digital transformation of contract administration, highlighting the potential of FIDIC contracts to enhance the resilience and sustainability of energy infrastructure projects.
References
Цифра Т.Ю. Практичний досвід реалізації міжнародних будівельних контрактів в Україні. Будівельне виробництво. 2017. Вип. 62/2. С.45-48.
Nwogu P. C., Emedosi A. FIDIC Form of Contract: A Study Review. British Journal of Environmental Sciences. 2024. Т. 12. № 2. С. 43-48. DOI: https://doi.org/10.37745/bjes.2013/vol12n24348.
Ostrynskyi V., Nykytchenko N., Sopilko I., Krykun V., Mykulets V. EPC-contracts using in renewable energy: Legal and practical aspect. Revista Amazonia Investiga. 2022. Т. 11. № 52. С. 309–317. DOI: https://doi.org/10.34069/AI/2022.52.04.33.
Fernando T., Geetha Sethu S. FIDIC Contracts: Applicability in UAE & COVID-19 Impact. Proceedings of the 2021 International Conference on Computational Intelligence and Knowledge Economy (ICCIKE). 2021. С. 42–45. DOI: https://doi.org/10.1109/ICCIKE51210.2021.9410780.
Wen Z., Zhou Q. Some suggestions for China construction project investment control present situation based on FIDIC contract. Applied Mechanics and Materials. 2012. Т. 209-211. С. 1294-1298. DOI: https://doi.org/10.4028/www.scientific.net/AMM.209-211.1294
Purnus A., Bodea C. N. Correlation between time and cost in a quantitative risk analysis of construction projects. Procedia Engineering. 2014. Т. 85. С. 436–445. DOI: https://doi.org/10.1016/j.proeng.2014.10.570,
Hain M., Schermeye, H., Uhrig-Homburg M., Fichtner W. Managing renewable energy production risk. Journal of Banking & Finance. 2018. DOI: https://doi.org/10.1016/J.JBANKFIN.2018.09.001.
Fanzeres B., Street A., Barroso L. Contracting Strategies for Renewable Generators: A Hybrid Stochastic and Robust Optimization Approach. IEEE Transactions on Power Systems. 2015. № 30. С. 1825-1837. DOI: https://doi.org/10.1109/TPWRS.2014.2346988.
Arnold U., Yıldız, Ö. Economic risk analysis of decentralized renewable energy infrastructures – A Monte Carlo Simulation approach. Renewable Energy. 2015. № 77. С. 227-239. DOI: https://doi.org/10.1016/J.RENENE.2014.11.059.
Algarvio, H. The Economic Sustainability of Variable Renewable Energy Considering the Negotiation of Different Support Schemes. Sustainability. 2023. DOI: https://doi.org/10.3390/su15054471.
Maier S., Street A., McKinnon K. Risk-averse portfolio selection of renewable electricity generator investments in Brazil: An optimised multi-market commercialisation strategy. Energy. 2016. № 115. С. 1331-1343. DOI: https://doi.org/10.1016/J.ENERGY.2016.09.064.
Xiao D., Chen H., Dai X., Tan B., Huang J. Financial Risk Management for Intermittent Renewable Energy Trading in Deregulated Power Markets: A Systematic Review. 2021 IEEE Sustainable Power and Energy Conference (iSPEC). 2021. С. 1903-1908. DOI: https://doi.org/10.1109/iSPEC53008.2021.9736012.
Zhao, D., Wang, H., Huang, J., & Lin, X. Insurance Contract for High Renewable Energy Integration. 2022 IEEE International Conference on Communications, Control, and Computing Technologies for Smart Grids (SmartGridComm). 2022. С. 271-277. DOI: https://doi.org/10.1109/SmartGridComm52983.2022.9960994.
Charoenngam, C., & Yeh, C. Contractual risk and liability sharing in hydropower construction. International Journal of Project Management. 1999. № 17. С. 29-37. DOI: https://doi.org/10.1016/S0263-7863(97)00064-1.
Legon, G. Research on the risk management model of projects under FIDIC conditions: Taking Xiaolangdi Project Lot 2 as the case. Engineering, Business, Environmental Science. 2011. URL: https://www.semanticscholar.org/author/G.-Legon/146813823.
Federation of International Consulting Engineers (FIDIC). FIDIC official website. 2025. URL: https://fidic.org
Tsyfra T.Y. (2017). Practical experience in implementing international construction contracts in Ukraine [Practical experience in implementing international construction contracts in Ukraine]. Budivelne vyrobnytstvo, vol. 62(2), pp. 45–48.
Nwogu, P. C., & Emedosi, A. (2024). FIDIC form of contract: A study review. British Journal of Environmental Sciences, vol. 12(2), pp. 43–48. DOI: https://doi.org/10.37745/bjes.2013/vol12n24348
Ostrynskyi V., Nykytchenko N., Sopilko I., Krykun V., Mykulets V. (2022). EPC-contracts using in renewable energy: Legal and practical aspect. Revista Amazonia Investiga, vol. 11(52), pp. 309–317. DOI: https://doi.org/10.34069/AI/2022.52.04.33
Fernando, T., & Geetha Sethu, S. (2021). FIDIC contracts: Applicability in UAE & COVID-19 impact. Proceedings of the 2021 International Conference on Computational Intelligence and Knowledge Economy (ICCIKE), pp. 42–45. DOI: https://doi.org/10.1109/ICCIKE51210.2021.9410780
Wen Z., Zhou Q. (2012). Some suggestions for China construction project investment control present situation based on FIDIC contract. Applied Mechanics and Materials, 209-211, 1294–1298. DOI: https://doi.org/10.4028/www.scientific.net/AMM.209-211.1294
Purnus A., Bodea C. N. (2014). Correlation between time and cost in a quantitative risk analysis of construction projects. Procedia Engineering, vol. 85, pp. 436–445. DOI: https://doi.org/10.1016/j.proeng.2014.10.570
Hain M., Schermeyer H., Uhrig-Homburg M., Fichtne, W. (2018). Managing renewable energy production risk. Journal of Banking & Finance. DOI: https://doi.org/10.1016/J.JBANKFIN.2018.09.001
Fanzeres B., Street A., Barroso L. (2015). Contracting strategies for renewable generators: A hybrid stochastic and robust optimization approach. IEEE Transactions on Power Systems, vol. 30, pp. 1825–1837. DOI: https://doi.org/10.1109/TPWRS.2014.2346988
Arnold U., Yıldız Ö. (2015). Economic risk analysis of decentralized renewable energy infrastructures – A Monte Carlo simulation approach. Renewable Energy, vol. 77, pp. 227–239. DOI: https://doi.org/10.1016/J.RENENE.2014.11.059
Algarvio H. (2023). The economic sustainability of variable renewable energy considering the negotiation of different support schemes. Sustainability. DOI: https://doi.org/10.3390/su15054471
Maier S., Street A., McKinnon K. (2016). Risk-averse portfolio selection of renewable electricity generator investments in Brazil: An optimised multi-market commercialisation strategy. Energy, vol. 115, pp. 1331–1343. DOI: https://doi.org/10.1016/J.ENERGY.2016.09.064
Xiao D., Chen H., Dai X., Tan B., Huang J. (2021). Financial risk management for intermittent renewable energy trading in deregulated power markets: A systematic review. 2021 IEEE Sustainable Power and Energy Conference (iSPEC), 1903–1908. DOI: https://doi.org/10.1109/iSPEC53008.2021.9736012
Zhao, D., Wang, H., Huang, J., & Lin, X. (2022). Insurance contract for high renewable energy integration. 2022 IEEE International Conference on Communications, Control, and Computing Technologies for Smart Grids (SmartGridComm), pp. 271–277. DOI: https://doi.org/10.1109/SmartGridComm52983.2022.9960994
Charoenngam C., Yeh C. (1999). Contractual risk and liability sharing in hydropower construction. International Journal of Project Management, vol. 17, pp. 29–37. DOI: https://doi.org/10.1016/S0263-7863(97)00064-1
Legon, G. (2011). Research on the risk management model of projects under FIDIC conditions: Taking Xiaolangdi Project Lot 2 as the case. Engineering, Business, Environmental Science. Available at: https://www.semanticscholar.org/author/G.-Legon/146813823
Federation of International Consulting Engineers (FIDIC). FIDIC official website. 2025. Available at: https://fidic.org
