《PROJECT FINANCE A LEGAL GUIDE SECOND EDITION》

1. THE PARTIES’OBJECTIVES1

1.1The host government1

1.2 The private sector sponsors2

1.3 The lenders3

2. THE CHOICE OF VEHICLE7

2.1The pre-development phase7

2.2 General considerations when choosing a vehicle9

2.3 The unincorporated joint venture11

2.4 The general partnership13

2.5 The limited partnership14

2.6 The incorporated company16

2.7 The EEIG17

2.8 The European Company20

3. THE CONTRACTUAL FRAMEWORK23

3.1Types of contract23

3.2 Deal philosophy24

3.3 Compulsory Competitive Tendering (“CCT”)27

3.4 Shareholders agreements34

3.5 Concession agreements and BOT projects36

3.6 Construction contracts45

3.7 Operation and maintenance agreements60

3.8 Supply contracts65

3.9 Offtake agreements：general66

3.10 Gas Sales Agreements67

3.11 Pass-through offtake agreements71

3.12 Power Purchase Agreements：the standard risk allocation74

4. BANKABILITY85

4.1General85

4.2 Force Majeure88

4.3 Requirements for bankability94

4.4 Lenders’security concerns103

5. THE CREDIT AGREEMENT105

5.1Basic terms105

5.2 The non-recourse or limited recourse concept111

5.3 Some general issues116

5.4 NPVs and cover ratios118

5.5 Control accounts123

5.6 Leasing126

5.7 Hedging127

5.8 Negotiating a project credit agreement131

5.9 Intercreditor issues146

6. SECURITY AND RELATED ISSUES149

6.1The purpose of security149

6.2 The featherweight floater151

6.3 Comparative issues156

6.4 Direct agreements and collateral warranties159

6.5 Enforcement and lender liability168

6.6 North Sea security169

6.7 Sponsor support169

7. INSURANCE ISSUES173

7.1The lenders’perspective173

7.2 The non-vitiation issue174

7.3 Typical insurance provisions in a project credit agreement179

7.4 Mandatory local insurance；reinsurance184

7.5 Miscellaneous insurance issues186

8. EXPORT CREDIT AND MULTILATERAL AGENCIES187

8.1Commercial and Political Risk187

8.2 Export Credit Agencies189

8.3 Multi-lateral agencies：IFC and EBRD201

8.4 The European Investment Bank203

8.5 The European Investment Fund206

8.6 Intercreditor issues involving ECAs and EIB 206

9. OTHER LEGAL ISSUES209

9.1Environmental liability209

9.2 European Community aspects222

10. SOME SPECIFIC AREAS OF PROJECT FINANCE239

10.1The Private Finance Initiative (the “PFI”)239

10.2 The North Sea253

10.3 Electricity projects in the United Kingdom261

10.4 Co-generation projects263

10.5 Bridges and roads268

10.6 Cable television269

10.7 Satellites271

Ⅱ. CURRENT TRENDS273

11.1The capital markets；project bonds273

11.2 Refinancings276

11.3 Securitisation279

Index285