Project Finance
Contents
- 1 Introduction
- 2 Parties To A Project Financing
- 2.1 Parties and their roles
- 2.2 Project company/borrower
- 2.3 Sponsors/shareholders
- 2.4 Third-party equity
- 2.5 Banks
- 2.6 Facility agent
- 2.7 Technical bank
- 2.8 Insurance bank/account bank
- 2.9 Multilateral and export credit agencies
- 2.10 Construction company
- 2.11 Operator
- 2.12 Experts
- 2.13 Host government
- 2.14 Suppliers
- 2.15 Purchasers
- 2.16 Insurers
- 2.17 Other parties
- 2.18 Summary of key lenders’ concerns
- 3 Section 3 Project Financing Documentation
- 4 Section 4 Project Structures
- 5 Section 5 Sharing Of Risks
- 6 Section 6 Security For Projects
- 7 Section 7 Insurance Issues
- 8 Section 8 The Project Loan Agreement
- 9 Section 9 Export Credit Agencies And Multilateral Agencies
Introduction
Origins of project financing
Definition of project finance
Extent of recourse
Why choose project finance?
Structuring the project vehicle
Key sponsor issues
Project implementation and management
Parties To A Project Financing
Parties and their roles
Project company/borrower
Third-party equity
Banks
Facility agent
Technical bank
Insurance bank/account bank
Multilateral and export credit agencies
Construction company
Operator
Experts
Host government
Suppliers
Purchasers
Insurers
Other parties
Summary of key lenders’ concerns
Section 3 Project Financing Documentation
Role of documentation
Loan and security documentation
Project documents
Force majeure
Lender requirements for project documents
Section 4 Project Structures
Approach to financing
Bonds
Leasing
North Sea model
Borrowing Base model
==“Build Operate Transfer” “BOT” model
Forward Purchase model
Section 5 Sharing Of Risks
5.1 Identification and allocation of risks 35 5.2 Ground rules 35 5.3 Categories of project risks 36
Section 6 Security For Projects
6.1 Approach of lenders 43 6.2 Reasons for taking security 43 6.3 Universal security interests 44 6.4 Scope of security 45 6.5 Third party security 48 6.6 Direct agreements 50 6.7 Host government support 52 6.8 Comfort letters 52 6.9 Governing law 53 6.10 Security trusts 54 6.11 Formalities 54 6.12 Problem areas 54
Section 7 Insurance Issues
7.1 Role of project insurances 55 7.2 Who insures? 55 7.3 Scope of cover 55 7.4 Problem areas 55 7.5 Protection for lenders 56 7.6 Broker’s undertaking 57 7.7 Reinsurance 58
Section 8 The Project Loan Agreement
8.1 Warranties, covenants and events of default 59 8.2 Project bank accounts 61 8.3 Appointment of experts 61 8.4 Information and access 62 8.5 Cover ratios 63 8.6 Governing law and jurisdiction 65 8.7 Completion issues 66
Section 9 Export Credit Agencies And Multilateral Agencies
9.1 The role of export credit agencies in project finance 67 9.2 An introduction to the G7 ECAs 67 9.3 The advantages of involving ECAs in a project 67 9.4 The OECD consensus 68 95 Departing from consensus 69 9.6 Categories of ECA support in the context of a project financing 69 97 The changing role of the ECA in project finance 73 9.8 ECAs and credit documentation 74
