The deployment of renewable energy infrastructure requires multimillion long-term investments that involve dozens of extensive studies of all sorts, numerous stakeholders, public and private, each of them bound to the project company and to each other through one to several agreements. One could prudently say that the complexity of the agreements corresponds to the importance of what is at stake in the agreement, in other words, the bigger the stake, the more complex the contract. In Project Finance, these contracts are one of the most relevant pieces of the financing puzzle, as they represent together with the obtained permits and licenses the “asset” of the project company. If a power purchase agreement (PPA), for instance, has good conditions relative to the average market conditions, e.g., a higher offtake price or a longer term, it will create more “asset” value for the project. This complexity requires the participation of experts, advisors, lawyers, financiers, promoters and sometimes representatives of the public administration who will discuss and negotiate the contract terms from their perspective. All agreements are relevant, however, some of them, because of the high impact they might have on the future revenue stream of the project, require special attention and care from the contracting parties. The offtake contract, the EPC and O&M contracts, the shareholders agreement, and the share purchase agreement as well as the facility agreement clearly belong to this category and will be thoroughly analyzed.

错误:搜索内容不能为空,请输入英文关键词
错误:关键词超出字数限制,请精简
高级检索

Contracts in Non-recourse Project Finance

  • Farid Mohamadi

摘要

The deployment of renewable energy infrastructure requires multimillion long-term investments that involve dozens of extensive studies of all sorts, numerous stakeholders, public and private, each of them bound to the project company and to each other through one to several agreements. One could prudently say that the complexity of the agreements corresponds to the importance of what is at stake in the agreement, in other words, the bigger the stake, the more complex the contract. In Project Finance, these contracts are one of the most relevant pieces of the financing puzzle, as they represent together with the obtained permits and licenses the “asset” of the project company. If a power purchase agreement (PPA), for instance, has good conditions relative to the average market conditions, e.g., a higher offtake price or a longer term, it will create more “asset” value for the project. This complexity requires the participation of experts, advisors, lawyers, financiers, promoters and sometimes representatives of the public administration who will discuss and negotiate the contract terms from their perspective. All agreements are relevant, however, some of them, because of the high impact they might have on the future revenue stream of the project, require special attention and care from the contracting parties. The offtake contract, the EPC and O&M contracts, the shareholders agreement, and the share purchase agreement as well as the facility agreement clearly belong to this category and will be thoroughly analyzed.