Lease Direct Agreement

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. Direct agreements are also commonly referred to as “tripartite agreements,” reflecting the fact that it is an agreement between three parties, i.e.: construction contract: Projectco will enter into the construction contract with the contractor under which Projectco`s construction obligations from the project agreement will be passed on to the contractor. 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. Agreements on government guarantees have emerged as an extension of the approach that underlies the direct agreement of lenders. Guarantee agreements are concluded between the Authority and the contractors who enter into a contract with Projectco. The objective is that if projectco does not meet its contractual obligations during the construction phase, the support of Projectco`s corresponding mission can guarantee the completion of the project. In addition, the Authority may take over Projectco`s operating contract at the end of the project. 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. 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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