It is a simple declaration that does not cover mining, shipping and supply contracts related to the importation of coal (which, in itself, could be more complex than the financing regime), nor contracts for the supply of energy to consumers. In developing countries, it is not uncommon for one or more public bodies to be the main consumers of the project and distribute the “last kilometre” to the consumer population. The corresponding sales contracts between the government authorities and the project may include clauses guaranteeing a minimum rate of removal and thus guaranteeing a certain level of turnover. In other sectors, including road transport, the government can collect road tolls and revenues, while providing the project with a guaranteed annual amount (as well as clearly defined upside and downside conditions). This will minimize or eliminate the risks associated with transportation demand for project investors and lenders. Among the types of projects for which project financing is frequently used is: the direct agreement of the lenders: it is a tripartite 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. This agreement will also provide lenders with the opportunity to intervene directly or through a candidate or representative to resolve the termination event or to find another party that is acceptable to the Authority to assume Projectco`s rights and obligations under the project agreement. Project funding documents almost always contain a common Terms Agreement – and should always be included. An agreement on common terms is an agreement between and between the project lenders and the project company, which invites the common conditions for all project financing documents, as well as the relationship between them, with definitions, conditions, the order of voting rights and voting rights for exceptions and amendments. Tripartite actions can lead to difficult negotiating issues, but they are a critical document in terms of project financing. An operating and maintenance agreement (O-M) is an agreement between the project company and the operator. The project company delegates the management of the operation, maintenance and often the performance of the project to a serious operator with industry expertise under the O-M agreement.
The operator could be one of the sponsors of the project company or a third-party supplier. In other cases, the project company can operate and maintain the project itself and, finally, provide technical assistance to an experienced company under a technical assistance agreement.