Aeolus Helios Electrical $($Pty$)$ Ltd owns a $140$MW renewable energy$/$electricity generation complex and entered into a $10$ year operate and maintain contract with Franklin$-$Faraday $($Pty$)$ Ltd $($the company which also executed the EPC contract for this asset$),$ the asset remains the property of Aeolus Helios Electrical $($Pty$)$ Ltd$.$

Note: Do not use the generic terms $$customer$$ and $$contractor$$ in your answer. Those are placeholders but those parties have very particular names as specified above.

Residual value risk is related to the uncertainty in the value of the $140$MW renewable energy$/$electricity generation complex after $10$ years when the operate and maintain contract comes to an end. The residual value risk assumes that regular maintenance occurs according to best practices and is thus completely different from the maintenance risks.

Answer the questions by clearly indicating the $39\mathrm{.}1$ and $39\mathrm{.}2,$ etc. when you type the answers.

$39\mathrm{.}1$ Will it be possible to either prevent or minimise the risk? How should that be done? $(2)$

$39\mathrm{.}2$ Who by default carry the risk? $(1)$

$39\mathrm{.}3$ Is the residual$-$value risk a force majeure event or not? Justify your answer $(2)$

$39\mathrm{.}4$ Which party in the contracting model can control and is best able to carry the remaining risk and how should that risk be transferred to the relevant party id they do not carry it by default? $(2)$

$39\mathrm{.}5$ How should exposure to the risk be rewarded if the parties agreed a fixed price contract? $(1)$