Common use of Escalation Factor Clause in Contracts

Escalation Factor. The escalation factor for any Fiscal Year y will be calculated using the following formula: Where y≤2014: Where y>2014: Escalationy Escalationy = 1 = mCap ⎛ ⎜( m1+ − )× CPIy ⎞ ⎟ Where ⎝ 2014 ⎠ • mcap = the proportion of the Availability Payment that is associated with the bidder’s cost base that is not subject to movements in indexation and defined as 85% in this Agreement • CPIy = CPI for July of Fiscal Year y, provided that if such CPI is not yet published as at the date of calculation it shall be the then most recently published monthly CPI • CPI 2014 = CPI for July 2014

Escalation Factor. The escalation factor for any Fiscal Year y will be calculated using the following formula: Where y≤2014: Escalationy = 1 Where y>2014: Escalationy Escalationy Escalation = 1 = mCap ⎛ ⎜( m1m + ⎛(1 − m )× CPIy ⎞ ⎜ ⎟ y Cap ⎝ cap CPI ⎠2014 Where ⎝ 2014 ⎠ • mcap = the proportion of the Availability Payment that is associated with the bidder’s cost base that is not subject to movements in indexation and defined as 85% in this Agreement • CPIy = CPI for July of Fiscal Year y, provided that if such CPI is not yet published as at the date of calculation it shall be the then most recently published monthly CPI • CPI 2014 = CPI for July 2014