LMA documentation is established after extensive consultation with leading credit practitioners and law firms to present an agreed common vision of documentation structures An acceptance agreement is an agreement between the project company and the buyer (the party that purchases the product/service that produces/provides the project). In the case of project financing, revenues are often contracted (instead of being sold on a market basis). The purchase agreement regulates the mechanism of price and volume of revenues. The objective of this agreement is to provide the project company with stable and sufficient revenues to settle its project debt obligation, cover operating costs and provide proponents with some necessary return. A delivery contract is concluded between the project company and the supplier of the necessary raw material/fuel. Financiers generally require that a direct relationship be established between them and the consideration for this contract, obtained through the use of a tripartite instrument (sometimes called an act of approval, direct agreement or subsidiary agreement). The tripartite statutes define the circumstances in which financiers can “intervene” in the context of project contracts in order to remedy a possible failure. A credit agreement is concluded between the project company (borrower) and the lenders. The credit agreement regulates the relationship between lenders and borrowers. It defines the basis on which credit can be used and repaid and contains the usual provisions found in a business credit agreement.

It also contains additional clauses to meet the specific requirements of the project and project documents. The identification and allocation of risks is an essential element of project financing. A project may be subject to a number of technical, environmental, economic and political risks, particularly in developing and emerging countries. Financial institutions and project promoters may conclude that the risks associated with the development and operation of projects are unacceptable (non-financial). “Several long-term contracts, such as construction, supply, purchase and concession contracts, as well as a large number of condominium structures, are used to create incentives and discourage opportunistic behavior from parties involved in the project.” [3] Implementation templates are sometimes referred to as “project resolution methods”. Funding for these projects must be distributed among several parties in order to spread the risk associated with the project while ensuring profits for each party involved. The establishment of these risk allocation mechanisms makes it more difficult to manage the risks associated with developing countries` infrastructure markets, as their markets present higher risks. [4] Where a project company has an assistance contract, the delivery contract is usually structured in such a way that it meets the general conditions of the registration contract, such as for example. B the duration of the contract, the provisions relating to a case of force majeure, etc. The volume of input deliveries required by the project company is usually related to the completion of the project. For example, under a AAA, the electricity buyer who does not need electricity can ask the project to close the plant and continue to pay for capacity – in this case, the project company must ensure that its fuel purchase obligations can be reduced in parallel.

The degree of supplier commitment may vary. Our documentation is developed after extensive consultation with leading credit practitioners and law firms, in order to present a common vision of the agreed documentation structures. Standardizing the “Boiler Plate” domains of documents allows lenders and borrowers to focus on the most important business aspects of individual transactions. The interconnection agreement shall lay down the provisions, including the following provisions. For example, Acme Coal co. imports coal. Energen Inc. provides energy to consumers.