The Shareholders` Pact (SHA) is an agreement between the promoters for the creation of an ad hoc entity (SPC) with regard to the development of projects. It is the most fundamental structure held by sponsors in a project financing operation. This is an agreement between the sponsors and looks into: this document focuses on a number of hidden issues that must be taken into account when reviewing the acquisition agreement and the EPC contract. Before a product is delivered or money changes ownership under the agreement, the Offtake agreement offers the greatest benefit, as the agreement was reached and the agreement probably would not have been respected. We will not stress its importance enough. While it is more likely that our deal team will prepare the project documents, if we do not prepare the remaining project documents, we should be responsible for preparing the acquisition agreement. The acquisition agreement is one of the most important documents of a project financing transaction, given the continuing depressed commodity prices that are putting pressure on projects and their financing. The acquisition agreement is the agreement under which the purchaser purchases all or a substantial portion of the facility`s production and provides the source of revenue to support project financing. Overall, the main factors that need to be taken into account in an acquisition agreement are the length, price and solvency of the buyer. An agreement between the project company and a public body (the adjudicator power) is called a concession agreement.
The concession agreement grants the project company the use of public assets (for example. B of a land or a crossing of the river) for a specified period of time. A status of the concession would be found in most of the projects in which the government participates, for example. B for infrastructure projects. The concession contract can be signed by a national/regional government, a municipality or a specific body created by the state for the granting of the concession. Examples of concession agreements are contracts for the following: offtake agreements also contain standard clauses that include recourse – including sanctions – to each party in the event of a violation of one or more clauses. Offtake agreements are carefully developed, long-term agreements between buyers and sellers, which are negotiated and concluded even before the thematic project is developed, take effect when the development of the project is completed and production is put online and continues for a long time, at least several years. These agreements help the project owner finance the project and, indeed, are most likely necessary, as the offtake agreements are a promise of future revenue and proof of the existence of a market for the product. Project financing in developing countries peaked during the Asian financial crisis, but the subsequent slowdown in industrialized countries was offset by growth in OECD countries, leading to a peak in project financing in 2000 worldwide.
The need for project financing remains high worldwide, as more and more countries need an increasing supply of public services and infrastructure. In recent years, project financing programs have become increasingly common in the Middle East, some with Islamic funds. An agreement between the financing parties and the project company defining the conditions common to all financial instruments and their report (including definitions, conditions, order of use, project accounts, voting rights for exceptions and amendments). Agreement on common terms greatly clarifies and simplifies the multi-financing of a project and ensures that the parties have a common understanding of key definitions and critical events. Taketake agreements are generally used to help the sales company acquire financing for future construction, expansion or new equipment projects by promising future revenues and demonstrating existing demand for goods.