Power purchase agreements (PPAs) are used in a wide range of transactions that facilitate many major objectives of government policy in fostering economic development, reducing prices by introducing competition, and preserving security of supply and protection against intermittent renewable generation by maintaining diversity of fuel types in the generation mix. The purpose a PPA is intended to serve will influence key features of its commercial and legal terms in different ways. The design of PPAs is also influenced by the particular characteristics of electricity as a product and the commercial operational and legal structures of the markets within which the PPAs operate. This chapter analyses how these factors influence the price and other terms that tend to be used by independent power generation projects in developed and emerging markets across the world. It then examines the main issues that have to be negotiated in a PPA to protect each of the parties against the risks presented by the nature of the asset and of the relevant power market.