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International Project Finance, 3rd Edition edited by Dewar, John (14th August 2019)

Index

Edited By: John Dewar

From: International Project Finance (3rd Edition)

Edited By: John Dewar

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From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2015. All Rights Reserved. Subscriber: null; date: 17 September 2019

(p. 617) Index

Accounts agreements
access and confidentiality 7.127
account banks
generally 7.110, 7.113
rights of 7.122
undertakings 7.123, 7.125
accounts, onshore/ offshore location of 7.113
common terms 7.110, 7.116
covenants 7.125
default events, and 7.112
excess funds, use of
cash substitution and credit support 7.121
distribution and dividend restrictions 7.119
permitted investments 7.120
instructing parties, role of 7.126
payments waterfall 7.114–7.118
security, acknowledgment of 7.124
Achalandage 13.47
Acid mine drainage (AMD) 14.69
Acte authentique 13.51
Acte sous seing privè 13.51
Advisers
auditors’ comfort letters 10.105–10.106
construction role 2.92–2.93
feasibility studies 4.04
financing role 2.77–2.80
operational role 2.104
origination role 2.38–2.41
Africa
local law and courts, reliability of 1.39
multilateral development banks 3.45–3.46, 9.04, 9.21–9.22, 9.32–9.33, 9.45
OHADA
background 13.141, 13.144
French influence 13.146–13.148
institutions 13.152–13.156
objectives 13.143–13.148
project finance, development 13.140
Treaty regime 1.39–1.40
African Development Bank 3.45–3.46, 9.04, 9.21–9.22, 9.32–9.33, 9.45
Agents
impaired, definition 7.20
insurance brokers’ letter of undertaking 6.91–6.94
Agreement on Government Procurement (GPA) 2.33–2.37
All risks insurance 6.05, 6.12–6.15, 6.22
Alternative dispute resolution (ADR)
advantages 16.92
conciliation 16.93–16.95
dispute boards 16.98
expert determination 16.96–16.97
management resolution 16.99
mediation 16.93–16.95
Ancillary agreements
direct agreements 12.105–12.114
equity support
completion support 12.31–12.41
equity capital contributions 12.10–12.30
generally/ overview 12.05–12.09
non-financial support 12.05, 12.07
ownership interest vs. debtor-creditor relationships 12.11–12.12
post-completion support 12.42–12.46
quantum of equity 12.13–12.14
sponsors’ obligations, and 12.09
generally 12.01–12.04
security arrangements
balance considerations 12.65
bank accounts 12.86–12.90
choice of law, and 12.71
contractual rights 12.75–12.82
enforceability of security 12.62–12.64
financial collateral arrangements 12.96–12.100
fixed or floating charges 12.91–12.95
further assurance clauses 12.51–12.53
generally 1.62, 12.47–12.50
importance of 12.64–12.65
insurance 12.104
land and buildings 12.74
lender’s approach 12.55–12.58
moveable property 12.73–12.74
negative pledges 12.64
permitted investments 12.101–12.103
plant and equipment 12.74
power of attorney clauses 12.52–12.53
project company’s assets 12.70–12.74
reasons for 12.59–12.65
receivables 12.83–12.85
secured parties’ rights 12.54
sponsors’ interests 12.66–12.69
structure of 1.63
tangible assets, and 12.71–12.74
Anti-corruption 3.46, 4.114–4.121
credit agreement clauses, and 7.67–7.73
LMA guidance on agreement clauses 7.67, 7.69
money laundering 4.121–4.124
terrorism, financing of 4.121
Arbitration see also Alternative dispute resolution; Litigation
arbitral awards
appeals 16.23
(p. 618)
New York Convention 16.62–16.63
recognition 1.54
Washington Convention 16.64
arbitration clauses
ADR approaches 16.93–16.99
appeals rules 16.102
choice of institution 16.71–16.72
choice of law 16.89–16.90
choice of tribunal 16.73–16.75
common clauses 16.66–16.67
disclosure rules 16.20–16.21, 16.81
drafting 16.21
entry of judgment clauses 16.85–16.86
exclusivity 16.68–16.69
fees and costs 16.88
final and binding effect 16.87
generally 16.65
jurisdiction 16.69, 16.83–16.84
language of arbitration 16.77
midnight clauses 16.66
multi-tiered dispute resolution 16.91–16.92
non-contractual claims, and 16.70
privacy and confidentiality 16.82
qualification requirement 16.101
qualification requirements 16.101
scope of arbitration 16.70
seat of arbitration 16.78–16.80, 16.82
set-aside actions 16.109
severability 16.76
umbrella clauses 16.37
unilateral option clauses 16.68–16.69
waiver clauses 16.106–16.107, 16.109
arbitrators
independence and impartiality 16.75
nationality 16.74
qualifications 16.101
selection 16.73–16.75
choice of forum 1.52–1.55, 16.15, 16.52, 16.60
choice of mechanism 16.15
civil law jurisdictions, in
advantages 16.20
disclosure rules 16.11, 16.20
unilateral option clauses 13.137–13.139, 16.20
disadvantages 16.19, 16.23–16.24
enforcement
arbitral awards, of 1.54, 16.28, 16.53, 16.61–16.64, 16.106–16.107
early/ interim relief 16.19, 16.108
judgments, of 16.12, 16.54–16.60
set-aside actions 16.109
international arbitration 4.61
advantages and disadvantages 16.20
civil law jurisdictions, in 16.20
investment treaties
consent to arbitration 16.28, 16.30, 16.43–16.44
ICSID rules 16.29–16.30, 16.64
multi-party arbitrations 16.91–16.92, 16.105
ADR, role of 16.92
permissive joinder, and 16.104
project structures, and 16.04–16.105
precedent, role of 16.22
proceedings 16.16–16.17
arbitrators, appointment of 16.18–16.19
bringing claims 16.17
set-aside actions 16.109
UNCITRAL 16.30, 16.72, 16.93
Asian Development Bank (ADB) 9.04, 9.19
Automobile insurance 6.28–6.29
Average debt service cover ratios 3.06
Bail-in powers
material amendments 7.24
non-European institutions, and 7.24–7.25
principles of 7.22
standard clauses 7.26
Banks
accounts agreements 7.110, 7.113, 7.122–7.123, 7.125
commercial bank lending 3.08, 3.19–3.23
security over accounts 12.86–12.90
Basel III/ Basel IV 7.66, 10.08
Berne Union 8.27
Best efforts underwriting 3.66, 3.70–3.71, 10.56
Bidding procedures
governments, role of 2.32–2.37
infrastructure/ PPP projects 14.335–14.337
Bilateral investment treaties (BITs) see Investment treaties
Blue Sky nuclear power projects 14.315–14.316
Bondholders
intercreditor agreements, and 7.177–7.182
consent requirement 7.178
indemnification provisions 7.180–7.182
voting arrangements 7.178–7.179
Bonds see also Project bonds
one-time funds 3.34
project financing, role in 2.74, 3.25, 3.30
Bordereau 13.30, 13.33
Breakage costs, hedging 13.105–13.110
Build, lease, transfer (BLT) 2.144
Build, operate, transfer (BOT) 2.143
Build, own, operate (BOO) 2.142, 14.319–14.320
Build, own, operate, transfer (BOOT) 5.79
Build, transfer, operate (BTO) 2.145
Cahier des charges 13.57
Call options 7.170–7.171
Cancellation
civil law jurisdictions, in
breach by project company 13.101
default events 13.91–13.101
force majeure 13.94–13.99
hedging breakage costs 13.105–13.110
insolvency, by 13.111–13.114
nullity of project contract 13.92–13.93
ongoing contracts 13.125–13.126
(p. 619)
overview 13.89–13.90
public interest 13.99–13.100
concession agreements App 6
credit agreements, and 7.28, 7.30–7.39
EPC contracts App 7
offtake/ power purchase agreements App 9
operation and maintenance agreements App 10
prepayments, and 7.28, 7.30–7.39
Capital contributions 12.10–12.30
alternative routes 12.10–12.12
entitlement to equity 12.22–12.27
equity bridge loans 12.29–12.30
host governments, role of 12.11
joint venture/ partnership agreements App 5
maintenance of capital rules 12.16–12.18
shareholder loans 12.19–12.21
shares or subordinated loans 12.15
thin capitalization 12.21
Capital markets see also Project bonds
credit ratings, role of 3.25, 3.28
disclosure rules 3.29
generally 10.02, 10.22
listing 10.112
other jurisdictions, in 10.40
US securities regulation 10.24–10.35
financing commitments 3.32
funding source, as 3.08, 3.25–3.28, 10.06–10.07
intercreditor issues 3.31
negative arbitrage 3.33
one-time funds 3.34
waivers and amendments 3.30
Cashflow ratios
credit agreements, in 7.91–7.95
debt service cover ratios 7.83, 7.94–7.95
generally 7.91
loan life cover ratio 7.84, 7.92–7.93
Cash substitution 7.121
Cash sweep mechanisms 7.28, 7.37–7.38, 14.117
Cession Daily see Daily assignment
Change of control 7.37
Change of law
credit agreements clauses 7.65
environmental and social risks, and 4.74
impacts of
compliance costs 14.51–14.52
energy projects 14.191
oil and gas projects 14.51
renewable energy projects 14.235
insurance 6.42
risk assessment 1.42–1.43
taxation 1.42
Chemical contamination 6.42
Choice of forum
arbitration 1.52–1.55, 16.15, 16.52, 16.60
investment structure, and 2.120, 2.129, 16.52
judgments, enforcement of 16.60
waiver of defences 16.106–16.107
Choice of law 1.48–1.50, 12.71
dispute resolution 16.89–16.90
Civil disturbance 4.67, 6.17, 6.41–6.43
Civil law jurisdictions
arbitration
advantages 16.20
disclosure rules 16.11, 16.20
unilateral option clauses 13.137–13.139, 16.20
bank accounts, security over 13.59–13.60
competition law 13.25–13.26
Daily assignment 13.27–13.54
acknowledgment, effect of 13.38–13.41
application 13.36
beneficiaries 13.31
conditions 13.37
creditors’ rights 13.53–13.54
effect of 13.35
excluded assets 13.50–13.52
formalities 13.51–13.52
form of 13.33
included assets 13.47–13.49
pledges over business concerns 13.46–13.49
receivables 13.32
transferability 13.34
transfer of risk and margins 13.42–13.45
direct agreements
insolvency 13.84
step-in rights 13.119–13.122, 13.128
stipulation pour autrui 13.85–13.88
fiducie regime
application to security 13.81–13.83
general principles 13.76–13.80
hedging breakage costs 13.105–13.110
indemnification of project company
hedging breakage costs 13.105–13.110
insolvency
direct agreements, and 13.84
pre-filing claims 13.111–13.112, 13.124
proceedings, management of 13.127–13.128
project company, of 13.111–13.114
security, enforceability of 13.113–13.114
mortgages over real property
costs 13.58
enforcement 13.56–13.57
rights 13.55
OHADA
background 13.141, 13.144
French influence 13.146–13.148
institutions 13.152–13.156
objectives 13.143–13.148
project finance, development 13.140
treaty regime 13.139–13.140
origins of project finance 13.01
project companies
indemnification by public authority 13.102–13.104
insolvency of 13.111–13.114
project termination by breach from 13.101
security granted by 13.115–13.133
(p. 620)
public projects
affermage (concession) contracts 13.02–13.03, 13.05, 13.24
breach by public authority, consequences of 13.25–13.26
call for tenders 13.17–13.18
competitive procedures 13.19–13.23
EU Concession rules 13.13
EU Procurement rules 13.10–13.12
feed-in tariff regime 13.06–13.08
hedging breakage
implementation, in France 13.14–13.24
indemnification by public authority 13.102–13.104
overview 13.09
power purchase agreements 13.06–13.08
public private partnerships 13.01, 13.04–13.05, 13.14–13.16
remedies
direct agreements 13.119–13.122
insolvency 13.123–13.124
insolvency proceedings management 13.127–13.128
security granted by project company 13.115–13.133
security granted by sponsors 13.134–13.136
security interests
secured lending, issues arising from
early termination/ cancellation 13.89–13.101
indemnification of project company 13.102–13.110
insolvency of project company 13.111–13.114
security granted by project company 13.115–13.133
automatic stay 13.123–13.124
direct agreements 13.119–13.122
insolvency proceedings management 13.127–13.128
ongoing contracts, termination of 13.125–13.126
pre-bankruptcy claims, prohibition of payment 13.124
retention rights, with 13.115–13.116
retention rights, without 13.117–13.118
security granted by sponsors 13.134–13.136
security interests
daily assignment 13.27–13.54
fiducie regime, and 13.81–13.83
mortgages over real property 13.55–13.58
overview 13.27
pledges over bank accounts 13.59–13.60
pledges over business assets 13.27–13.54
pledges over shares 13.61–13.75
security agents 13.76–13.83
shares, security over
cash collateral 13.71–13.75
control of project company 13.64–13.67
enforcement procedures 13.68–13.70
gage-espèces 13.71–13.75
pledges, general rules 13.61–13.63
termination or cancellation
breach by project company 13.101
default events 13.91–13.101
force majeure 13.94–13.99
hedging breakage costs 13.105–13.110
insolvency, by 13.111–13.114
nullity of project contract 13.92–13.93
ongoing contracts 13.125–13.126
overview 13.89–13.90
public interest 13.99–13.100
wrongful trading 15.20
Clearing and settlement services 10.98
Clear market provisions 3.98–3.105
Clearstream 10.98
Climate change
emissions reduction commitments 14.179
mining projects, impacts on 14.71–14.73
Comfort letters 1.22, 5.80, 10.105–10.106
Commercial banking
bank debt as funding source 3.08, 3.19–3.23
capital reserves requirements 3.21
club structures 3.20
credit restraints 10.08–10.09
hedging 3.23
interest rates 3.21
loan terms 3.21
Commercial risk
dispute resolution, and
appeals, availability of 16.12
arbitration, choice of 16.14–16.25
general considerations 16.02–16.05
jurisdiction clauses 16.07
litigation in national courts, choice of 16.08–16.13
Commitment letters 3.60–3.65, 3.88
Commodities
Islamic Murabaha structures 11.73
price fluctuations 14.97–14.101, 14.107–14.109
Compensation see Damages
Competition law
civil law jurisdictions 13.25–13.26
merger controls 4.109–4.110, 4.113
permitted exceptions 4.111
restrictions 4.108–4.110
state aid 4.112, 13.08, 14.309
Completion
EPC contracts, key provisions App 7
equity support
completion defined 12.35–12.41
overview 12.31–12.34
post-completion 12.42–12.46
risk
cost overruns 4.11, 4.16
delay 4.11, 4.15
EPCM structures 4.16
equity support, and 12.32–12.34
guarantees 4.14, 14.39–14.40
infrastructure/ PPP projects 14.345
mining projects 14.87–14.91
offtake/ revenue risk 4.24–4.31
oil and gas projects 14.39–14.41
(p. 621)
overview 4.08–4.09
performance testing 4.23
renewable energy projects 14.240–14.244
technology development 4.17–4.22
‘turnkey’ construction contracts 4.10–4.13, 4.19
Concession agreements
key provisions App 6
oil and gas projects 14.08–14.09
political risks 5.78–5.83
Conciliation 16.93–16.95
Conditions precedent 1.58, 1.60
credit agreements, in 7.10–7.16, 7.96
default events, and 7.12
lenders sign-off 7.16
liability risks, and 7.15
loan drawdowns, and 7.12, 7.14
unanimity requirement 7.14
waivers 7.12
ECA agreements, in 8.36–8.37
key provisions App 1
mining projects 14.117
oil and gas projects 14.37
power purchase agreements, in App 9
project bonds, in 10.94
Confidentiality
accounts agreements 7.127
arbitration 16.82
Conflict of laws 1.48–1.50
choice of forum 1.52–1.55
enforceability 1.51
Islamic finance 11.41–11.44
Connected projects 2.58–2.59
Consequential loss insurance 6.05, 6.22–6.24
Construction and erection all risks (CEAR) 6.05, 6.12–6.15, 6.22
Construction stage
advisers and consultants 2.92–2.93
contractors, role of 2.83–2.86
infrastructure 2.87–2.91
access needs 2.89
housing and social development needs 2.91
power and water 2.90
insurance 2.93
Islamic finance, multi-sourced
Istinisna’a-Ijarah 11.45–11.46
Wakala-Ijarah 11.35–11.49
nuclear power projects 4.12
oil and gas projects 14.38
overview 2.81–2.82
payments waterfall 7.117
petrochemicals projects 4.12
project bonds, disadvantages 10.16–10.17
remedies
delays, for 5.29, 5.31, 5.36
liquidated damages 5.29
performance damages 5.37
restructuring, creditors’ options 15.117–15.118
risk allocation
credit support 5.41
delays, remedies for 5.29, 5.31, 5.36
EPC contracts 5.26–5.29, 5.36, 5.46
EPCM structures 5.42–5.44, 5.47
general provisions 5.26–5.30
infrastructure/ PPP projects 14.345
liability caps 5.39–5.40
liquidated damages 5.29
payment schedules 5.32–5.33
performance damages 5.37
scheduling guarantees 5.35, 5.37
split contracts 5.45–5.47
warranties 5.38
risk matrices
petrochemicals projects App 3
water/ power projects App 2
warranties
renewable energy projects 14.245
risk allocation, and 5.38
Consultants see Advisers; advisers
Contract law
breach of contract insurance 4.68
contractual obligations, relief from 5.11–5.15
Contractors
further assurance clauses 12.51–12.53
subcontractors in EPC contracts App 7
treaty-based protection from political risks 16.41
Contrats de partenariat public privé 13.04–13.05
Conventions de délégation de service public see Affermage
Convertibility of currency 1.27–1.28, 4.47–4.50
Coordination committees 15.58–15.63
Corporate governance 1.17–1.18
Corporate taxation 1.31–1.33
Corrupt practices
anti-corruption laws 4.114–4.121
corporate liabilities for 4.122
credit agreement assurances, and 7.67–7.73
due diligence 4.114, 7.70
extra-territorial jurisdiction 4.120
industry transparency measures 4.123–4.124
money laundering 4.121–4.124
overview 4.114
terrorism, financing of 4.121
Cost of carry 10.18
Costs
arbitration 16.88
breakage, hedging 13.105–13.110
change of law compliance 14.51–14.52
civil law jurisdictions 13.58, 13.105–13.110
credit agreement clauses 7.18, 7.65–7.66
drawdown of loans 7.18
increased costs clauses 7.66
legal costs insurance 6.25
minimization approaches 2.12–2.13
mortgages over real property 13.58
nuclear power projects 14.263–14.265
premiums costs 4.54
risk matrices
petrochemical projects App 3
water/ power projects App 2
(p. 622) Covenants
anti-amendment covenants 7.170, 7.172
credit agreements, in 7.13–7.14, 7.77–7.81
intercreditor agreements 7.170, 7.172
project bonds 10.10, 10.99–10.101
restructuring, and 15.51–15.52
sample provisions 7.81, App 1
Coverage ratios 3.06–3.07
average/ minimum debt service cover ratios 3.06
debt service cover ratios 7.83, 7.94–7.95
loan life cover ratios 1.09–1.11
credit agreements, in 1.09–1.11, 7.84, 7.92–7.93
mining projects, in 14.116–14.117
oil and gas projects, in 7.84
Credit agreements
bail-ins, contractual recognition of 7.21–7.26
cash sweeps 7.28, 7.37–7.38
change of law protection, and 7.65
common terms agreements 7.06
conditions precedent 1.58, 1.60, 7.10–7.16, 7.96
default events 7.09, 7.12, 7.32, 7.44, 7.102–7.107, 7.106, App 1
due diligence 7.70
ECA agreements 8.31–8.32, 8.35–8.37
financial models 7.96–7.100
financial ratios 7.37, 7.82–7.95
increased costs clauses 7.65–7.66
interest payments 7.40–7.45
loan drawdowns 7.12, 7.14, 7.17–7.20
market disruption clauses 7.46–7.49
obligations 7.04, 7.10
prepayments and cancellation clauses 7.28, 7.30–7.39
purpose clauses 7.08–7.09
ratio testing dates 7.101
remedies 7.107–7.109
repayment clauses 7.27–7.30
representations and warranties 7.74–7.76, App 1
reputational risk 7.68
sanctions and anti-corruption clauses 7.67–7.73
Sharia’a transactions 1.61
standard forms, use of 1.60
structures 7.05
tax gross-up clauses 7.53–7.55
unanimity requirement 7.14
US FATCA rules 7.56–7.64
waivers 7.12–7.14
waterfall cash flow arrangements 1.59
yield protection clauses 7.50–7.52
Creditors see also Intercreditor agreements
creditors’ rights, in civil law jurisdictions 13.53–13.54
fulcrum creditors 15.31, 15.89
no creditor worse off principle 7.22
preferred creditors 2.72, 9.27, 9.31–9.36
restructuring
coordination committees 15.58–15.63
standstill agreements 15.74–15.87
Credit ratings
downgrades 7.37
investment grade ratings 3.28, 7.37, 10.13
nuclear power projects 14.264–14.265
project bonds, and 10.13, 10.17
role of 3.03, 3.25, 3.28
Credit support
accounts agreements, and 7.121
construction contracts, risk allocation 5.41
excess funds, use of 7.121
preferred creditor status 2.72, 9.27, 9.31–9.36
risk allocation, in construction contracts 5.41
sponsors, role of 2.53–2.55
Cross-border mergers 4.108–4.109
Cross-charge mechanisms 2.140
Currencies
revaluation 4.46
swap markets 4.49–4.50
transfer and convertibility 1.27–1.28, 4.47–4.50
Currency risk
convertibility 4.47
currency transfer restrictions 4.66
overview 4.43–4.45
revaluation 4.46
transferability 4.48–4.50
Customary international law
fair and equitable treatment 16.33–16.35
most-favoured nation 16.36
national treatment 16.36
non-discrimination principle 16.36
Customs duties 1.37
Daily assignment 13.27–13.54
acknowledgment 13.42, 13.45
application 13.36
beneficiaries 13.31
conditions 13.37
creditors’ rights 13.53–13.54
effects of 13.35, 13.38–13.41
excluded assets 13.50–13.52
formalities 13.51–13.52
form of 13.33
included assets 13.47–13.49
pledges over business concerns 13.46–13.49
receivables 13.32
transferability 13.34
Damages
construction stage 5.37
liquidated damages 5.29, 14.234, 14.342, App 7
milestone payment schedules 5.31, 5.33, 11.33, 11.37, 11.45, 14.195
nationalization, compensation for 7.37
performance damages 5.37
Debt financing see also Export credit agencies; Multilateral and development finance agencies; Project bonds
equity bridge loans 7.90, 7.137–7.142
lenders, role of 2.70–2.73
participants 2.68–2.69
(p. 623)
preferred creditor status 2.72
shareholder loans 3.14–3.16, 12.19–12.21
Sharia’a law principles, and 2.75
subordinated debt 3.14–3.16, 7.129, 7.140
Debt service cover ratios 7.83, 7.94–7.95
Debt to equity ratios 3.06
cashflow ratios 7.84, 7.91–7.95
credit agreements, in 7.83, 7.86–7.90
debt service cover ratios 7.83, 7.94–7.95
loan life cover ratio 7.84, 7.92–7.93
ratio testing dates 7.101
Default events
accounts agreements 7.112
civil law jurisdictions 13.91–13.101
credit agreements, in 7.09, 7.12, 7.32, 7.44, 7.102–7.107, App 1
delay 5.29, 5.31, 5.36
ECA agreements 8.49
equity bridge loans 7.142
interest payments 7.44–7.45
joint ventures/ partnership agreements App 5
project bonds 10.99
remedies 7.107–7.109
restructuring triggers 15.47–15.50, 15.53
sample provisions 7.106, App 1, App 5
Defaulting lenders
definition 7.17, 7.20, 7.26
prepayment provisions 7.33
Delay
consequential loss insurance 6.22–6.24
default events 5.29, 5.31, 5.36
delay in start-up insurance 6.05
EPC contracts 14.194
Delays
completion risk 4.11, 4.15
construction stage, in 5.29, 5.31, 5.36
remedies for 5.29, 5.31, 5.36
Depository Trust & Clearing Corporation (DTC) 10.98
Design, build, finance and operate (DBFO) 5.79
Development finance agencies see Multilateral and development finance agencies
Dilution mechanisms 2.139–2.140
Direct agreements
civil law jurisdictions, in 13.84
insolvency 13.84
stipulation pour autrui 13.85–13.88
documentation 12.105–12.114
restructuring, and 15.72–15.73, 15.125–15.126
Directors
liability insurance 6.32
restructuring, role in 15.19–15.27
Disclosure 3.29
arbitration 16.20–16.21, 16.81
civil law jurisdictions, in 16.11, 16.20
insurance 6.58–6.59, 6.62
litigation process 16.11
project bonds
generally 10.02, 10.22
listing 10.112
offering circulars 10.63–10.83
other jurisdictions, in 10.40
utmost good faith 6.58–6.59, 6.62
Dispute boards 16.98
Dispute resolution see also Arbitration; Litigation
ADR
advantages 16.92
conciliation 16.93–16.95
dispute boards 16.98
expert determination 16.96–16.97
management resolution 16.99
mediation 16.93–16.95
breach of contract insurance 4.68
choice of forum 1.52–1.55, 16.51, 16.60
choice of mechanism 16.06–16.25
commercial risk, disputes involving
appeals, availability of 16.12
arbitration, choice of 16.14–16.25
general considerations 16.02–16.05
jurisdiction clauses 16.07
litigation in national courts, choice of 16.08–16.13
enforcement
arbitral awards, of 1.54, 16.28, 16.53, 16.61–16.64
judgments, of 16.12, 16.53–16.60
generally 1.04, 16.01
political risk, disputes involving
contractual, regulatory and tax risks 16.26
ICC or UNCITRAL mechanisms 16.30
ICSID rules 16.29–16.30
insurance 16.45–16.49
investment agreements 16.27–16.30
investment structures 16.50–16.52
investment treaty protections 16.31–16.42
project structures, and
multi-party arbitration 16.105
parallel proceedings 16.104
sample provisions
concession agreements App 6
EPC agreements App 7
joint venture/ partnership agreements App 5
power purchase agreements App 9
Distressed debt investors 15.31
Dividend restrictions 7.120
Drawdown provisions
costs 7.18
credit agreements, in 7.12, 7.14, 7.17–7.20
breakage costs obligations 7.18
closing and first drawdown App 1
financial crisis of 2008, and 7.17
flexibility 7.19
mitigation of loss 7.20
notice periods 7.17
ECA agreements, in 8.40–8.41
equity bridge loans 7.139
project bonds, in 10.18
(p. 624) Droit au bail 13.47
Droit de rétention 13.54
Droit de suite 13.55
Due diligence
anti-corruption 4.114, 7.70
credit agreements 7.70
defence, in US securities regulation 10.28–10.31, 10.50
environmental checklist App 4
export restrictions 4.129
feasibility studies 4.03
host country risk assessments 1.12–1.16
importance of 1.02–1.03
issuers, by 10.52–10.53
lawyers, by 4.05, 10.51
lenders, by 4.06
multilateral and development finance agencies, and 9.39
nuclear power projects 14.269–14.270
project bonds 10.50–10.53
project bonds, in 10.50–10.53
restructuring 15.64–15.73
risk assessment 1.12–1.16, 4.03–4.407, App 4
underwriters, by 10.51–10.52
Earthquakes 6.39
Emissions reduction 14.179
Employers’ liability insurance 6.30–6.31
Energy projects see also nuclear power projects; renewable energy projects
adjacent sites, negotiation regarding 5.58
concession agreements 5.74
environmental responsibilities
emissions reduction commitments 14.178
environmental indemnification 5.57
liability for contamination cleanup 5.57
EPC contracts 14.180–14.182
delay or non-performance 14.194
failure to meet performance 14.195
generally 14.180–14.181
infrastructure inadequacy/ failure 14.196
key issues 14.181–14.182
feed-in tariff regime 13.06–13.08, 14.174
feedstock agreements 14.184–14.188, App 8
financing considerations
cost overruns 14.199–14.201
financial ratios 14.205
generally 14.198
project agreements and counterparties 14.203–14.204
single purpose/ single asset companies 14.202
fuel supply agreements 5.74, 14.184–14.188
funding sources
capital markets 10.06–10.07
project bonds 10.05
generally 14.142, 14.206
emissions reduction commitments 14.178
market overview 14.147–14.172
IPP Model
development 14.143–14.146
feedstock, fuel and supply agreements 14.184–14.188
fuel policy changes 14.117, 14.178
generally 14.173
offtake agreements 14.174–14.179
operation and maintenance agreements 14.183
power purchase agreements 13.06–13.08, 14.174–14.179
structure 14.144–14.146
offtake agreements 14.174–14.175
operation and maintenance agreements 14.183
Power purchase agreements 13.06–13.08, 14.174–14.179
contents 5.68, 14.179
credit standing 5.69
force majeure provisions 14.179
power purchasers 14.177
risk allocation in 5.61, 5.67–5.72
step-in rights 14.179
termination provisions 5.68, 14.179
risks
allocation 5.74
capacity 14.190
currency risk 14.190
delay or non-performance 14.194
failure to meet performance 14.195
generally 14.189
infrastructure inadequacy/ failure 14.196
market changes/ deregulation 14.191–14.192
offtake/ revenue risk 4.29
political risk 5.74
pricing 14.190
privatization/ restructuring 14.193
risk matrices App 2
supply risk 4.39
technology risk 4.19, 14.197
site purchase or lease agreements 5.57–5.58
supply agreements 14.184–14.188
Enforcement
ancillary agreements 12.62–12.64
arbitral awards 1.54, 16.28, 16.53, 16.61–16.64
New York Convention 16.62–16.63
set-aside actions 16.109
Washington Convention 16.64
civil law jurisdictions, in
mortgages over real property 13.56–13.57
pledges over bank accounts 13.59–13.60
pledges over business assets 13.27–13.54
pledges over business concerns 13.46–13.49
pledges over shares 13.61–13.75
security over shares 13.68–13.70
governing law 1.51
intercreditor agreements
subordinated creditor protections 7.170, 7.172
judgments 16.12, 16.54–16.60
appeals, availability of 16.12
choice of court agreements 16.60
choice of forum 16.60
EU Regulation on 16.59
service procedures 16.58
sovereign immunity, and 16.106
waiver of defences 16.106–16.107
(p. 625)
legal opinions 12.127–12.128
mezzanine facility agreements 7.136
mortgages over real property 13.56–13.57
restructuring
creditors’ options 15.120–15.126
general options 15.104–15.107
Sharia’a law, of 1.51, 1.64
take or pay contracts 5.63
US securities regulation 10.31
Engineering, procurement, and construction (EPC) contracts see EPC contracts
Engineering, procurement, and construction management (EPCM) contracts 4.16, 5.42–5.44, 5.47
Enseigne 13.47
Entire agreement clauses 3.97
Environmental and social responsibilities
chemical contamination insurance 6.42
emissions reduction 14.178
energy projects 5.57, 14.178
Equator Principles 1.46, 2.73, 4.80–4.85, 9.44
export credit agencies, and 8.44–8.48
IFC Performance Standards 1.45, 4.79, 4.85–4.86, 9.42–9.43
mining projects, of 14.84–14.86
multilateral finance agencies, and 9.42–9.44
regulatory requirements 4.73, 4.75–4.77
site purchase or lease agreements indemnification 5.57
Environmental and social risks
challenges brought by affected persons or interested parties 4.74–4.75
change of law 4.74
chemical contamination 6.42
domestic implementation of law 4.76–4.77
due diligence checklist App 4
environmental impact assessments 3.46, 4.73
Equator Principles 1.46, 2.73, 4.80–4.85
greenhouse gas emissions 4.75, 14.178
infrastructure/ PPP projects 14.345
international guidelines 4.86–4.88
international law obligations 4.87
liability for discharge of contaminants 4.74, 4.78
liability for non-compliance with law 4.74
mining projects
acid mine drainage (AMD) 14.69
climate change 14.71–14.73
employment and population growth 14.79
environmental impacts 14.64–14.70
generally 14.63, 14.74
industry responsibility 14.84–14.86
public health 14.80–14.82
resettlement 14.75
safety 14.82
social impacts 14.74–14.83
tailings 14.70
water usage 14.76–14.78
multilateral agencies involvement, and 4.79
overview 4.73–4.79
permit uncertainties 4.74
regulatory requirements 4.73, 4.75–4.77
reputational risk 4.78
risk assessments 1.44–1.46
social and biological risks 4.75
EPC contracts
application of 5.26–5.29, 5.36
energy projects, and
delay or non-performance 14.194
failure to meet performance 14.195
generally 14.180–14.181
infrastructure inadequacy/ failure 14.196
key issues 14.181–14.182
key provisions App 7
risk allocation 5.26–5.29, 5.36, 5.46
split contracts, and 5.46–5.47
EPCM contracts 4.16, 5.42–5.44, 5.47
risk allocation 5.42–5.44, 5.47
Epidemic or plague 6.42, 14.82
Equator Principles 1.46, 2.73, 4.80–4.85, 9.44
Equity bridge loans
cross-default 7.142
debt service provisions 7.141
drawdowns 7.139
funding sources 3.13, 7.90
generally 7.90, 7.137–7.138
subordination 7.140, 7.141–7.142
Equity investors 3.05, 3.10–3.12 see also Sponsors
dilution and cross-charge mechanisms 2.139–2.140
equitably subordinated 12.02
equity bridge loans 3.13, 7.90
guarantees and enhancements 3.12
importance of 3.11
junior, mezzanine and senior lenders 12.02
nuclear power projects, in 14.321–14.322
public projects, in 2.18–2.20, 2.22
role and aims
credit support 2.53–2.55
generally 3.01
maximising return 2.47
project origination 2.46–2.52
sale of goods or service 2.49–2.50
securing offtake 2.51–2.52
skills and personnel 2.56–2.57
strategic expansion 2.48
vendor equity 14.321–14.322
Equity support
completion support 12.31–12.41
equity capital contributions 12.10–12.30
generally/ overview 12.05–12.09
non-financial support 12.05, 12.07
ownership interest vs. debtor-creditor relationships 12.11–12.12
post-completion support 12.42–12.46
quantum of equity 12.13–12.14
sponsors’ obligations, and 12.09
EURIBOR 3.21, 4.53
Euroclear 10.98
European Bank for Reconstruction and Development (EBRD) 3.45–3.46, 9.04, 9.26, 9.45
European Investment Bank (EIB) 3.45–3.46, 9.04, 9.32, 9.45
(p. 626) European Union
anti-corruption and money laundering 4.121–4.124
arbitration jurisdiction clauses 16.69
bail-in powers 7.21–7.24, 7.26
competition and merger controls 4.108–4.109, 4.113
judgments, cross-border enforcement 16.59
public projects
concession rules 13.13
procurement rules 13.10–13.12
securities regulation
disclosure rules 10.25, 10.36–10.39
exclusions 10.37
state aid rules 4.112, 13.08, 14.309
Excess funds, use of
cash substitution and acceptable credit support 7.121
distribution and dividend restrictions 7.119
permitted investments 7.120
Exeltium model nuclear power projects 14.315–14.316
Expert determination 16.96–16.97
Experts 4.04, 4.22
Explosions 6.42
Export controls, trade law compliance 4.128–4.129
Export credit agencies see also Multilateral and development finance agencies
advantages 3.38, 8.01–8.03, 8.07
Berne Union 8.27
conditions precedent 8.36–8.37
credit alternatives 8.08–8.16
comprehensive commercial/ political risk cover 8.11–8.13
debt guarantees 8.08–8.10, 8.13
direct loans 8.10
expansion of 8.16
political risk cover 8.11–8.14
tied credits 8.08–8.10
working capital facilities 8.15
cross-border investment 8.01
debt financing, role in 2.71–2.73, 3.03
definition 8.04–8.05
documentation
credit agreements 8.31–8.32, 8.35–8.36
regulation 8.30
drawdowns 8.40–8.41
environmental practice guidelines 4.86
features 8.05
funding considerations 8.07
funding sources
generally 3.03, 3.09, 3.37–3.41, 8.04
other governmental/ quasi-governmental sources 8.06
Helsinki Package 8.25–8.26
list of 8.58
multilateral and development finance agencies, differences from 9.01
nuclear power projects 14.323–14.328
objectives 3.37, 8.01, 8.04–8.05
OECD policies
financing guidelines 14.325–14.328
voluntary arrangement 8.18–8.28, 8.30
overview 8.01–8.03
Prague Committee 8.28
product types 3.39
purpose clauses 8.33–8.35
rebranding 3.03
regulation of 8.17
amendments 8.21
commercial interest reference rate (CIRR) 8.23, 14.326–14.327
concessionality 8.25
exceptions 8.19
information exchange 8.28
limited recourse financing regime, and 8.21
regulatory bodies 8.27–8.28
starting point of credit 8.22
ties aid support 8.25–8.26
uniform principles for 8.27–8.28
voluntary arrangements 8.18–8.28, 8.30
structure
conditions precedent 8.36–8.37
credit agreements 8.31–8.32, 8.35–8.36
default events 8.49
documentation 8.29–8.32
environmental and social considerations 8.44–8.48
fees or premiums 8.38–8.39
generally 8.29–8.32
intercreditor agreements 8.42–8.43
key provisions 8.49–8.51
override clauses 8.50
pro rata lending 8.40–8.41
purpose clauses 8.33–8.35
regulation 8.30
risk policy provisions 8.49
subrogation of rights 8.51
voting rights 8.42–8.43
trends 3.40, 8.02, 8.04
ECA bonds 8.54
financial crisis 2008 impacts 8.01–8.02, 8.56–8.58
fund investments 8.54
generally 8.52
non-OECD ECAs 8.53
residual risk arrangements 8.55
Export insurance 3.41
Expropriation
political risk protection 2.72, 4.65, 16.32
Extractive Industries Transparency Initiative (EITI) 4.123
Extraordinary recoveries 7.37
Fair and equitable treatment 16.33–16.35
FATCA (Foreign Account Tax Compliance Act)
credit agreement clauses, and 7.56–7.61
difficulties with 7.59
LMA Summary Note on 7.61–7.63
material modification, definition 7.58
model bilateral intergovernmental agreements (IGAs) under 7.59, 7.62
objectives 7.56–7.57
payments caught by 7.56–7.58
risk mitigation and negotiation 7.60, 7.64
withholding tax requirements 7.56–7.57
(p. 627) Feed-in tariffs 13.06–13.08, 14.174, 14.215–14.216
Feedstock suppliers 2.99–2.100, 4.37, App 8
agreements
energy projects 14.184–14.188
objectives 5.73
renewable energy projects 14.238–14.239
risk allocation in 5.73–5.77
Fees
arbitration 16.88
ECA agreements 8.38–8.39
Islamic finance 11.62
late payment fees 11.62
prepayment fees 11.62
Fiducie regime
application to security 13.81–13.83
general principles 13.76–13.80
Financial collateral arrangements 10.104, 12.96–12.100
Financial crisis of 2008
impact of
commercial banking restraints 10.08
export credit agency agreements, and 8.01–8.02, 8.56–8.58
funding sources, on 3.02
increased costs clauses, and 7.66
loan drawdown arrangements 7.17
market flex provisions, and 3.98
regulatory changes 7.66, 10.08
Financial models
credit agreements, in 7.96–7.100
assumptions 7.96, 7.100
disputes regarding 7.99–7.100
revisions 7.97–7.100
Financial ratios
average/ minimum debt service cover ratios 3.06
cashflow ratios 7.91–7.95
credit agreements, in
cashflow ratios 7.91–7.95
debt service cover ratios 7.83, 7.94–7.95
debt to equity ratios 7.83, 7.86–7.90
generally 7.37, 7.82–7.85
loan life cover ratio 7.84, 7.92–7.93
ratio testing dates 7.101
debt service cover ratios 7.83, 7.94–7.95
debt to equity ratios 3.06, 7.83, 7.86–7.90
generally 7.37, 7.82–7.85
loan life cover ratios 3.06, 7.84, 7.92–7.93
energy projects, in 14.205
mining projects, in 7.93, 14.116–14.117
oil and gas projects, in 7.84
mandatory prepayment conditions, and 7.37
ratio testing dates 7.101
reserve tail ratios 7.85
Financial sanctions 4.126–4.127
Finland
nuclear power projects 14.313–14.314
Firm commitment underwriting 10.56
Fixed charges 12.91–12.95
Fixed rate financing 4.54
Floating charges 12.91–12.95
Flood 6.39, 14.72
Force majeure
burden of proof 4.95, 4.97
cancellation 13.94–13.99
categorisation 4.98, 5.14
causation 4.97
clauses
civil law jurisdictions 13.94–13.99
contents of 5.13
effects of 4.93–4.94
concession agreements App 6
EPC contracts App 7
feedstock supply contracts App 8
frustration, and 4.99, 4.101
insurance
insurability 6.42
natural causes 6.39–6.40, 6.42
political/ non-natural causes 6.41–6.42
judicial interpretation 4.92, 4.96
mitigation requirement 4.95
offtake agreements App 9
operation and maintenance agreements App 10
power purchase agreements 14.179, 14.236–14.237, App 9
principle of 4.91–4.93
remedies 4.93–4.94, 4.98
risk allocation, and 5.11–5.15, 5.36
supervening events, impacts of 4.91–4.98
supply risk, and 4.39
termination 4.94, 13.94–13.99
warranties, and 2.100, 2.102
Forum, choice of see Choice of forum
Forward sale structures 2.148, 14.124
France see also Civil law jurisdictions
development finance institutions 9.07
disclosure rules 16.11
energy sector 14.154–14.156
nuclear power projects 14.315–14.316
export credit agencies 8.05
fiducie regime 13.76–13.83
Front running restrictions 3.75
Frustration, doctrine of
accrued rights and obligations, effects on 4.102–4.103
commercial impossibility 4.100
force majeure 4.99, 4.101
illegality of performance 4.100
judicial interpretation 4.99–4.100
limitations of 4.100–4.101
overview 4.99
remedies 4.103–4.105
supervening events 4.99–4.100
Fuel suppliers 2.99–2.100, 4.37
agreements
energy projects 14.184–14.188
objectives 5.73
risk allocation in 5.73–5.77
risk matrices App 2, App 3
(p. 628) Full value cover 6.39–6.40
Funding market cycle 3.04
Funding sources
bond markets 2.74, 3.25
capital markets 3.08, 3.25–3.34
changes in, influences on 3.08
commercial banking 3.08, 3.19–3.23
costs implications 4.52
credit ratings, role of 3.03, 3.25, 3.28
debt providers 3.05
equity providers 3.05, 3.10–3.12
financial crisis of 2008, impact of 3.02
financial ratios 3.06–3.07
funding market cycle 3.04
hedging products 2.76, 3.23
institutional investors 3.27
Islamic finance 3.24
leveraged and finance lease arrangements 3.50–3.51
mezzanine debt 3.17–3.18
one-time funds 3.34
overview 3.01–3.09
project trends 3.02
public sector lenders 3.09
export credit agencies 3.37–3.41
multilateral agencies/ development finance institutions 3.42–3.49
overview 3.35–3.36
stapled financing 4.51
subordinated shareholder debt 3.14–3.16
sukuk market 3.08
Further assurance clauses 12.51–12.53
Gage-espèces 13.71–13.75
Gharar 11.10, 11.13
Global notes 10.98
Governing law
choice of forum 1.52–1.55
choice of law 1.48–1.50
concession agreements App 6
enforceability 1.51
enforcement 1.51
feedstock supply contracts App 8
joint venture agreements App 5
offtake agreements App 9
overview 1.47–1.50
partnership agreements App 5
political risk insurance exclusions 4.72
power purchase agreements App 9
project bonds 10.48–10.49
security arrangements 1.63–1.64, 12.71
sovereign immunity 1.56
Governments see also Host governments
project structuring
advisers and consultants 2.32–2.93, 2.38–2.41, 2.77–2.80
bidding procedures 2.32–2.37
competitive advantage 2.31
costs minimization 2.12–2.13
efficiency management 2.24–2.25
new capital, attraction of 2.26–2.29
objectives 2.12–2.31
overview 2.05–2.08
private sponsors and equity investors 2.18–2.20, 2.22
risk transfer 2.14–2.23
technology development and training 2.30
public procurement rules 4.106–4.107
restructuring role 15.42
state aid 4.112
Grandfathering 7.58
Guarantees
completion risk 4.14, 14.39–14.40
ECA debt guarantees 8.08–8.10, 8.13
ECA performance tests App 7
equity providers 3.12
maintenance and operation guarantees 2.98
partial credit guarantees 9.23–9.24
partial risk guarantees 9.19–9.22
political risk exclusions 4.71
scheduling guarantees 5.35, 5.37
suppliers’ guarantees 2.100
technology risk 4.20
Hard underwriting 10.56
Health and safety 2.25, 4.73–4.76, 4.84, 4.86, 6.27
Hedging
currency risk, and 4.49
intercreditor agreements, and 7.173–7.176
where company has failed to make schedule payments 7.175
where lenders have accelerated the loans 7.174
where termination right arises due to illegality or tax events 7.176
interest rate hedging/ swaps 4.55–4.57, 7.115
project financing
breakage costs 13.105–13.110
role in, generally 2.76, 3.23
Helsinki Package 8.25–8.26
Host governments
change of law 1.42–1.43
choice of forum 1.52–1.55
concession agreements 5.78–5.83, 14.09
conflict of laws 1.48–1.50
corporate governance 1.17–1.18
currency transfer and convertibility 1.27–1.28
customs and immigration law 1.37
development agreements 5.78–5.83
dispute resolution 16.27–16.30
industrial regulation 1.19–1.24
legal certainty, and 1.38–1.41
local law restrictions 2.119
oil and gas projects 14.09, 14.12, 14.14–14.16
permits and consents 1.25–1.26
project finance objectives
costs minimization 2.12–2.13
efficiency management, and 2.24–2.25
new capital, attraction of 2.26–2.29
risk transfer 2.14–2.23
technology development and training 2.30
(p. 629)
project structuring 2.09–2.37
ownership structure considerations 2.114–2.123
risk assessment 1.12–1.16
service contracts 14.12
sovereign immunity, and 1.56
technology risk guarantees 4.20
trade law compliance 4.130
ICC dispute resolution mechanisms 16.30, 16.93
Ijarah
generally 11.20–11.22
multi-sourced financing with Istinisna’a
construction stage 11.45–11.46
general principles 11.32–11.34
operations stage 11.50–11.63
multi-sourced financing with Sukuk 11.65
multi-sourced financing with Wakala
construction stage 11.35–11.49
general principles 11.32–11.34
operations stage 11.50–11.63
Illegality, as prepayment condition 7.37
Immigration law 1.37
Imprévision 13.97
Increased costs clauses 7.65–7.66
Indentures 10.97, 10.99–10.102
Independent power producers (IPP) see Energy projects
Information gathering see also Due diligence; Offering circulars
restructuring 15.64–15.66
Information memorandum 10.02
Infrastructure projects
advantages 14.351
bid procedures 14.335–14.337
challenges 14.352
construction stage 2.87–2.91
access needs 2.89
housing and social development needs 2.91
power and water 2.90
Design Build Contracts 14.346, 14.348
financing considerations 14.349–14.350, 14.352
funding sources 14.336
limited recourse 14.340
operation and maintenance agreements 14.347–14.348
PPP agreements 14.341–14.345
contents 14.342
liquidated damages 14.342
obligations 14.342
project ownership 14.342
termination 14.342