Project Finance Credit Agreement

EPC contracts and turnkey contracts are similar, but they are not interchangeable. In addition to all the construction risks and responsibilities that the contractor develops in turnkey contracts, all risks related to planning, engineering and contracting are transferred to the contractor for the most part of all the purposes of the EPC contracts. Learn more about EPC contracts in project documents. Minority project owners may use off-balance sheet financing in which they disclose their participation in the project as an investment and exclude the liability of completion by disclosing it as an investment footnote. In the United States, this eligibility is determined by the Financial Accounting Standards Board. Many projects in developing countries also need to be covered by war risk insurance including hostile attacks, dilapidated mines and torpedoes, as well as civil unrest, which is generally not included in standard insurance policies. Today, some modified strategies, including terrorism, are classified as terrorism insurance or risk-fighting policy insurance. In many cases, an external insurer issues a performance loan to ensure the completion of the project in a timely manner by the contractor. Funding documents – Financing documents cover project debt financing, including priority debt and related facilities (e.g. B a cost overrun or other custodial arrangement) The above statement does not cover mining, marine and coal import supply contracts (which, in itself, could be more complex than the financing system).

contracts to supply electricity to consumers. In developing countries, it is not uncommon for one or more public bodies to be the main consumers of the project and distribute the “last kilometre” to the consumer population. The corresponding sales contracts between the government authorities and the project may include clauses guaranteeing a minimum rate of removal and thus guaranteeing a certain level of turnover. In other sectors, including road transport, the government can collect road tolls and revenues, while providing the project with a guaranteed annual amount (as well as clearly defined upside and downside conditions). This will minimize or eliminate the risks associated with transportation demand for project investors and lenders. However, overall, well-designed project funding documents are one of the keys to successful project funding and should be accepted in the same way by proponents and participants. Project funding documents are summarized below. Project financing documents that define loan terms for project financing and govern the relationship between lenders and the project company are the loan agreement.