When a project company has a support contract, the supply contract is generally structured to meet the terms and conditions of the takeover agreement, such as the duration of the contract. B, force majeure provisions, etc. The amount of input supply required by the project company is usually related to project performance. Under an AAE, the electricity purchaser who does not need electricity can ask the project to close the plant and continue to pay the capacity payment – in this case, the project company must ensure that its obligations to purchase fuel can be reduced in parallel. The level of commitment of the supplier may vary. If your project was funded by the 2007-2013 LIFE program, please use the documents published on the LIFE Project Management page (2007-2013). The most common project financing contract is the Engineering, Procurement and Construction (EPC) contract. A CBE contract generally provides for the contractor`s obligation to build and deliver the project facilities at a fixed, turnkey price, i.e. at a fixed price determined, at a given time, in accordance with certain specifications and with certain performance guarantees.

The EPC contract is quite complex from a legal point of view, which is why the project company and the EPC contractor require sufficient experience and knowledge of the nature of the project in order to avoid their mistakes and minimize the risks associated with the performance of the contract. If both parties have a contractual clause that authorizes entry fees[8], then there is a right, although there is no commitment [9], to assume a task that is not going well, or even the whole project. When and how important are: „What is the boarding process“ must be clearly defined in the security guarantee. [10] A takeover agreement is an agreement between the project company and the buyer (the party that buys the product/service that produces/provides the project). In the case of project financing, revenues are often contracted (instead of being sold on the basis of a trader). The catch agreement regulates the price and volume mechanism from which the revenues come. The objective of this agreement is to provide the project company with stable and sufficient revenues to cover the project`s financing obligation, to cover operating costs and to ensure some necessary returns for sponsors. Identifying and allocating risks is an important part of project funding. A project may face a number of technical, environmental, economic and political risks, particularly in developing and emerging countries. Financial institutions and project proponents may conclude that the risks associated with the development and operation of the project are unacceptable (unfinanable). „Several long-term contracts, such as construction, procurement, equity and concession contracts, as well as a large number of joint ownership structures, are used to coordinate incentives and discourage opportunistic behaviour by any party involved in the project.

[3] Implementation models are sometimes referred to as „project preparation methods.“ Funding for these projects must be distributed among several parties in order to spread the risk associated with the project while ensuring benefits for each party concerned. In designing these risk allocation mechanisms, it is more difficult to address the infrastructure risks posed by developing countries` markets, as their markets are more risky. [4] Project financing in developing countries peaked during the Asian financial crisis, but the subsequent slowdown in industrialized countries was offset by growth in OECD countries, leading to global project funding around the year 2000.