Que Es Un Direct Agreement



-April 11, 2021-

Que Es Un Direct Agreement

Mike Burroughs

Project sponsor: the person who plays an active role in the management of the project. The project sponsor owns Projectco and obtains profits, either through Projectco`s ownership or through management contracts, if the project is successful. The proponent often has to cover certain project liabilities or risks through bonds or management or service contracts. Financing agreements: The facility agreement is the main document between lenders and Projectco and contains the terms of project financing. Lenders will also need a security package and guarantees to protect borrowed funds. The loan agreement is discussed in more detail in our separate out-law guide on key issues for lenders in project financing contracts. Host Government/adjudicating authority: the government of the country where the project is based will likely be involved in granting authorisations and authorisations, both at the beginning and for the duration of a project. The awarding entity is the contracting authority that enters into the project agreement with Projectco. In addition to this guarantee, project lenders generally expect direct contractual relationships with counterparties with key project documents. This goal is achieved through direct agreements. Direct agreement often involves changes to the underlying project documents. This is particularly the case for concession contracts in which the project company obtains the concession before the lenders make a strong commitment. Funding often follows the award of the concession and lenders may require changes to the risk allocation in the concession contract in order to make the project bankable.

A direct agreement is an agreement that gives the project`s funders direct rights to some of the project`s important documents. These rights are explained in direct agreements in project financing operations - turnkey provisions. Direct agreements are also commonly referred to as "tripartite agreements," reflecting the fact that they are an agreement between three parties, i.e.: service contracts: Projectco enters into service contracts with service providers and transmits to these providers the service obligations imposed on them under the project agreement. As noted above, service providers offer guarantees to the Authority and, in certain circumstances, the Authority has intervention rights, subject to the rights of lenders. Equity investors: lenders or project proponents who do not expect to play an active role in the project. In the case of lenders, they will have an interest in in addition to the granting of loans as debt financing in order to obtain a higher return if the project is successful. In most cases, any equity investment is linked to an agreement allowing the equity investor to sell his shares in the project sponsor if the investor wishes to leave the project. Similarly, the sponsor of the project may have the opportunity to buy back the shares.

If necessary, a direct agreement may include clauses in which the consideration of the project document accepts the collection or transfer by the security of the rights of the project company, in accordance with the project document. The direct agreement of the lenders: this is a three-way agreement between the Authority, Projectco and the lenders, under which the Authority agrees to grant lenders a deadline for the early termination of the project agreement.


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