TABLE OF CONTENTS 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 Company in the financing documentation. As these are the basis for the financing, if any of the representations and warranties are later found to be incorrect this will create an event of default (cf. 13.11).
In effect, the representations and warranties are a check list of the key elements that lenders need to review in their due diligence to confirm that they are satisfied with the risks of the financing. (The Project Contracts also have extensive representations and warranties, e.g. from the EPC Contractor, which the lenders also review.) Typical representation and warranties provisions in the finance documentation are that the Project Company:
Is duly incorporated and has the power and has taken all necessary corporate actions to undertake the project and the financing
Is owned by the Sponsors in the proportions approved by the lenders
Has no business, assets, or subsidiaries, nor any contractual obligations, except those relating to the project (all of which have been disclosed to the lenders)
Has the capacity to enter into the various Project Contracts and other agreements, and that all these are legally valid and in effect, with no defaults outstanding; no event of force majeure has occurred affecting the Project Company or any Project Contracts
Has title to its property and all rights required to construct and operate the project
Has obtained all licenses and Permits required for the project and...
