OVERVIEW

The Project Contracts provide a basis for the Project Company's construction and operation of the project (cf. 2.2). The most important of these is the Project Agreement (i.e., a contract that provides the framework under which the Project Company obtains its revenues). (Other important Project Contracts are discussed in Chapter 7.)

The only types of projects that do not operate under a Project Agreement are those that sell a product or service to private-sector buyers in a commodity-based or open competitive market, such as mining or telecommunications projects, or "merchant" power plants (cf. 8.8.6), although they usually have some form of license to allow them to do this in lieu of a Project Agreement.

There are two main models for a Project Agreement: ^[1]

• An Offtake Contract, under which the Project Company produces a product and sells it to an Offtaker (cf. 6.1)

• A Concession Agreement, under which the Project Company provides a service to a public authority or directly to the general public (cf. 6.2)

These models have many characteristics in common: some of the issues that relate to both types of contract are discussed in 6.3 6.9.

It should be said that although many legal issues are discussed in this and the following chapters, they are not intended as a commentary on all the legal ramifications of Project Contracts and the associated financing documentation, but concentrate on the key issues likely to emerge in commercial negotiations between the Project Company and its project counterparts and lenders. ^[2]