A “Project Finance Agreement” is a legal document that outlines the terms and conditions for financing a specific project, typically in the infrastructure or energy sectors. The agreement is usually entered into between the project sponsor(s) and the lender(s) and sets out the terms of the loan, the security package, and the rights and obligations of each party.
Project finance agreements are used to finance large-scale projects that require significant upfront capital investment, such as power plants, toll roads, or other infrastructure projects. The financing structure typically involves a combination of debt and equity, with the lenders providing debt financing based on the projected cash flows of the project.
Project finance agreements are complex legal documents that require careful negotiation and drafting. They are typically prepared by experienced legal professionals with expertise in project finance and infrastructure development.