From Principles of Project Finance


Signature of the financing documentation alone does not mean that the lenders will start advancing funds to the Project Company. In order to draw down any debt at all, the project must first reach Financial Close. This is the date at which all Project Contracts and financing documentation have been signed, and the conditions precedent to the effectiveness of the lenders' commitments have been satisfied or waived. The conditions precedent are effectively a checklist of documents the lenders require as the basis for their financing; when these are provided the lenders are obliged to advance funds. (This does not mean that lenders have no obligations before that date; for example, if the financing documentation requires the lenders to keep information about the project confidential, this is effective on signing.)

The list of conditions precedent documentation for a project finance can be of immense length, often running into several hundred documents and certificates. Typical requirements by lenders (all of which must be satisfactory to them in form and content) include:

  • Corporate documentation

    • Corporate documentation, board resolutions, etc., for the Project Company

    • Similar corporate documentation for any other parties to Project Contracts or financing documentation, and providers of guarantees, bonding, or other security

    • Signed copies of the Shareholder Agreement(s) relating to the Project Company (cf. 4.5.2)

  • Project documentation

    • Evidence of title to (or right to use) the project site

    • Signed copies of all the Project Contracts and evidence that all their conditions precedent have been fulfilled and that they are in full force and...

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Topics of Interest

13.9 REPRESENTATIONS AND WARRANTIES The facts that form the basis of the lenders' provision of the project finance are set out and confirmed in representations and warranties given by the Project...

OVERVIEW This chapter examines some of the main financial structuring issues likely to arise once the commercial fundamentals and risks of the project, and the cash flow that results from these, have...

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...

OVERVIEW The life of a project can be divided into three phases: Development. The period during which the project is conceived, the Project Contracts are negotiated and signed, and the equity and the...

OVERVIEW This chapter summarizes the key provisions usually found in the Project Contracts that may be signed by the Project Company apart from the Project Agreement discussed in the last chapter,...