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- Preliminary Material
- Preface
- Table of Contents
- Notes on Contributors
- List of Abbreviations, Financial Terms, and Acronyms
- List of Islamic Abbreviations, Financial Terms, and Acronyms
- Glossary
- Table of Cases
- Table of Legislation
- Australia
- Canada
- CPR Institute for Dispute Resolution
- European Union
- France
- Germany
- Indonesia
- International Bar Association (IBA)
- International Centre for Dispute Resolution (ICDR)
- International Centre for the Settlement of Investment Disputes (ICSID)
- International Chamber of Commerce of the Court of International Arbitration (ICC)
- Korea
- London Court of International Arbitration (LCIA) 1998
- Organization for the Harmonization of Business Law in Africa Laws (OHADA)
- Saudi Arabia
- Singapore
- Tanzania
- United Kingdom
- United States of America
- United Nations Commission for International Trade Law (UNCITRAL)
- Table of International Treaties, Conventions, and Agreements
- Main Text
- Introduction
- 1 Approaching Legal Issues in a Project Finance Transaction
- Preliminary Material
- Introduction
- Overall Risk Assessment
- Assessing the Host Country
- Environmental and Social Considerations
- Governing Law Considerations
- Credit Documentation
- Security Packages
- Process Management
- 2 Project Participants and Structures
- Preliminary Material
- General Overview
- Project Participants: Stage One (Project Origination)
- An introduction to project origination
- The role of host governments
- The roles of advisers and consultants
- The role of private sponsors/equity owners
- The role of the project company
- Project Participants: Stage Two (Financing the Project)
- Project Participants: Stage Three (Constructing the Project)
- Project Participants: Stage Four (Operating the Project)
- Ownership and Project Structures
- 3 Sources of Funding
- Preliminary Material
- Introduction
- Sources
- Letters of Intent, Term Sheets, Commitment Letters, and Mandate Letters
- 4 Project Risks
- Preliminary Material
- General Overview
- Risk Identification—Due Diligence
- General Issues for All Projects
- Completion risk
- Operating risk
- Supply risk
- Currency risk
- Political risk
- Environmental and social risk
- Insurance
- Supervening events affecting contractual performance
- Force majeure
- Frustration
- Procurement rules
- Competition law and merger control
- Corrupt practices and money laundering
- Sanctions and trade law compliance
- Participant risk
- 5 Allocation of Risks in Project Documentation
- Preliminary Material
- Section A
- Section B
- 6 Insurance
- Preliminary Material
- Introduction
- Insurance Programme Design
- 6.10
- 6.11
- Material insurances—material damage insurance
- Construction erection all risk, builders’ risks, and construction all risks insurances
- Marine transit, aviation transit, transit ‘all risks’, and ‘goods in transit’ insurances
- Property damage ‘all risks’, and material damage/industrial all risks insurances
- Sabotage and terrorism, and site-wide terrorism insurance
- Material insurances—consequential loss insurance
- Material insurances—liability insurance
- Mandatory but non-material insurances
- Project Company Control
- The Breadth and Scope of the Insurance Programme
- Legal and Commercial Influences on Procurement
- Insurance Risk itself and Lenders’ Clauses
- 7 Principal Loan Finance Documentation
- Preliminary Material
- Introduction
- Credit Agreements
- 7.04
- 7.05
- 7.06
- 7.07
- Purpose clause
- Conditions precedent
- Drawdown of loans
- Contractual recognition of ‘bail-in’
- Repayments
- Prepayments and cancellation
- Interest
- Market disruption
- Yield protection
- Tax gross-up
- FATCA
- Increased costs
- Sanctions and anti-corruption
- Representations
- Covenants
- Financial ratios
- The financial model
- Ratio testing dates
- Events of default
- Remedies
- Accounts Agreements
- Mezzanine Facility Agreements
- Equity Bridge Facility Agreements
- Intercreditor Agreements
- 8 Official Funding Sources: Export Credit Agencies
- 9 Official Funding Sources: Multilateral and Development Finance Agencies
- 10 Documentation of Project Bonds
- Preliminary Material
- Introduction
- Why Issue Project Bonds?
- Securities Regulation and Legal Framework
- Disclosure
- Selling Restrictions
- Governing Law
- The Due Diligence Process
- The Underwriting Process
- Typical Project Bond Documentation
- 10.62
- Offering circular
- 10.63
- 10.64
- 10.65
- Categories of information in the offering circular
- 10.66
- 10.67
- A technical description of the project:
- Descriptions of material project agreements:
- Risk factors relating to the project and/or industry:
- A description of the issuer’s industry:
- Competitors:
- Use of bond proceeds:
- The ‘MD&A’:
- A description of the project’s other financing/indebtedness:
- A description of the issuer’s management team and board of directors:
- Description of shareholders/sponsors:
- Related party transactions:
- Regulatory and tax matters:
- Financial information
- Preliminary and final offering circulars
- Subscription/underwriting agreement
- Agreement among underwriters
- Bond trust deed/indenture and global note
- Intercreditor arrangements
- Security documents/collateral deed
- Auditor’s comfort letter
- Role of legal counsels and legal opinions
- Listing
- 11 Islamic Project Finance
- Preliminary Material
- Introduction
- Sources of Islamic Finance
- Islamic Finance Principles
- Islamic Finance Techniques
- Islamic Project Finance Techniques
- Conventional Project Finance Structures
- Multi-sourced Sharia’a-compliant Financings
- Islamic facilities
- 11.31
- Wakala–ijarah facility and istisna’a–ijarah facility—overview
- Wakala–ijarah facility and istisna’a–ijarah facility—construction phase
- Wakala–ijarah facility and istisna’a–ijarah facility—operations phase
- Project sukuk
- Other techniques utilized in a multi-sourced project financing
- Integrating the Conventional and Islamic Facilities
- 12 Ancillary Finance Documentation
- Preliminary Material
- General Overview
- Equity Support
- Security Arrangements
- Direct Agreements
- Legal Opinions
- 13 Project Finance in Civil Law Jurisdictions
- Preliminary Material
- Introduction
- Public Projects and Tender Offers
- Creating and Perfecting Security Interests
- Dailly assignment and pledges over business concerns
- 13.27
- 13.28
- 13.29
- Dailly assignment
- Beneficiary
- The type of receivables
- Form of the assignment
- Transferability
- Effects of the Dailly assignment
- Application of the Dailly assignment in French PPPs
- Conditions to be met
- Effect of the acknowledged Dailly assignment in French PPPs
- Transfer of risk and margins
- Pledges over business concerns
- Assets included in a pledge over business concern
- Assets excluded from the pledge over business concern
- Formalities
- Rights of creditors
- Mortgage over real property
- Security over bank accounts and shares
- Security agent
- Dailly assignment and pledges over business concerns
- Direct Agreements and Step-in Rights
- Issues Arising from Secured Lending
- Early termination or cancellation of project contracts
- Indemnification of the project company and the rights of the lenders
- Insolvency of the project company and enforcement of security
- Security granted by the project company
- Security interests with a retention right
- Security interests without a retention right
- Direct agreements and step-in rights
- Automatic stay and prohibition of payment of pre-bankruptcy claims
- Prohibition of termination of ongoing contracts
- Management and outcome of the insolvency proceedings
- Competition law
- Efficacy of direct agreements
- Security granted by the sponsors
- Effectiveness of Unilateral Dispute Resolution Clauses
- Influence of Civil Code in African Countries: Organisation pour l’Harmonisation en Afrique du Droit des Affaires (OHADA)
- 14 International Projects—Sector Focus
- Preliminary Material
- Section A—Oil and Gas
- Section B—Mining Projects
- General Overview
- Introduction
- Environmental and Social Impact
- Completion Risk
- Reserve Estimates and Market Risks
- Resource Nationalism and Political Risk
- Terms of a Mining Financing
- Streaming Agreements, Royalty Agreements, and other Alternative Finance Options
- Challenges in the Future
- Conclusion
- Section C—Conventional Power
- Introduction
- The IPP Model
- Overview of Power Markets
- IPP Risk Allocation and Contractual Structure
- Key Risks in an Independent Power Project
- 14.189
- Capacity and energy pricing and currency risk
- Changing markets/market deregulation
- Privatization and restructuring of power purchasers
- EPC contractor delay or non-performance
- Failure to achieve required performance levels
- Failure by power purchaser/state to construct and maintain transmission lines and related infrastructure
- New technology
- Financing Considerations
- Conclusion
- Section D—Renewable Energy
- Introduction
- Sources of Renewable Energy
- Increased Market Penetration
- Incentives for Renewable Energy Investment
- Development of Renewable Projects
- Project Site
- Transmission and Interconnection
- Conclusion
- Section E—Financing Nuclear Power Projects
- Introduction
- Challenges of Developing and Financing NPPs
- Why Hasn’t Project Finance Worked for NPPs?
- Financing Models for NPPs
- Conclusion
- Section F—Infrastructure/Public Private Partnerships
- 15 Defaults and Workouts: Restructuring Project Financings
- Preliminary Material
- Introduction
- Restructuring Protagonists
- Process
- Introduction
- The restructuring ‘trigger’
- Project finance covenants
- The impact of covenant ‘loosening’
- Material adverse change ‘triggers’
- Jurisdiction
- Contingency planning
- Creditor organization
- Information gathering
- Financial information
- Legal due diligence
- The standstill agreement
- Contents of a standstill agreement
- Restructuring negotiations
- Restructuring valuations
- An English lawyer’s approach to valuation
- The amount of ongoing debt
- Restructuring agreement and implementation
- Restructuring documentation
- Restructuring Options
- 16 Dispute Resolution in Project Finance Transactions
- Preliminary Material
- Introduction
- Disputes Involving Commercial Risk
- Commercial Risks that Frequently Result in Project Disputes
- The Choice between Litigation and Arbitration
- Disputes Involving Political Risk
- Contractual, regulatory, and tax risks
- Investment agreements
- Treaty-based political risk protections
- Political risks covered by investment treaties and statutes
- Potentially eligible project participants with treaty protections
- Consent to arbitration in investment treaties
- Political risk insurance
- Structuring investments to optimize political risk protections
- Enforcement of Judgments and Awards
- Dispute Resolution ‘Toolkit’
- 16.65
- Dispute resolution clauses, common components
- Exclusivity
- Scope of arbitration
- Institution selected for arbitration
- Selection of arbitration tribunal
- Severability
- Language of arbitration
- Seat of arbitration
- Scope of disclosure
- Privacy and/or confidentiality
- Jurisdiction
- Entry of judgment, judgment currency, and manner of payment
- Final and binding arbitration
- Payment of costs and legal fees
- Choice of law
- Reducing disruption—multi-tiered dispute resolution
- Typical means of ADR
- Reducing the Chance for Error: Qualification Requirements and Appeals
- Consolidation of Potential Disputes by Agreement
- Increasing Effectiveness: Early Remedies and Final Enforcement
- Further Material
- Appendix 1 Checklist of Conditions Precedent, Representations, Covenants, and Events of Default for Inclusion in Finance Documents
- Appendix 2 Risk Matrix: Independent Water/Power Project
- Appendix 3 Risk Matrix: Complex Petrochemical Project
- Appendix 4 Environmental Due Diligence Checklist
- Appendix 5 Overview of Key Provisions of a Joint Venture or Partnership Agreement
- 1 Capital Contributions
- 2 Compensation of Participants
- 3 Allocation of Cash and Tax Benefits
- 4 Participants’ Area of Responsibility
- 5 Management of the Venture
- 6 Expansion
- 7 Events of Default and Remedies
- 8 Restrictions on Rights to Transfer
- 9 Dissolution and Liquidation
- 10 Governing Law
- 11 Dispute Resolution
- Appendix 6 Key Provisions in a Concession Agreement
- Appendix 7 Checklist of Key Provisions in Turnkey Construction/EPC Contracts
- 1 Project Design
- 2 Scope of Work
- 3 Contract Price
- 4 Payment Schedule
- 5 Performance Security
- 6 Completion Schedule
- 7 Mechanical Completion
- 8 Performance Tests and Guarantees
- 9 Substantial Completion
- 10 Final Completion
- 11 Liquidated Damages
- 12 Force Majeure
- 13 Change Orders
- 14 Warranties
- 15 Indemnity
- 16 Subcontractors
- 17 Limitation on Liability
- 18 Termination or Suspension
- 19 Insurance
- 20 Dispute Resolution
- 21 Assignment
- Appendix 8 Checklist of Key Provisions in Feedstock Supply Contracts
- Appendix 9 Checklist of Key Provisions in Offtake/Power Purchase Agreements
- Appendix 10 Checklist of Key Provisions in Operation and Maintenance Agreements
- Index
- [18.205.26.39]
- 18.205.26.39
