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The Limited Recourse Loan Agreement is a specialized financing instrument commonly used in project finance and asset-based lending transactions in Indonesia. It is particularly relevant when lenders agree to look primarily to the cash flows and assets of a specific project or asset for repayment, rather than the borrower's other assets or resources. This type of agreement must comply with Indonesian banking regulations, including Law No. 7 of 1992 on Banking (as amended) and relevant OJK regulations. The document typically includes detailed provisions on security arrangements, project accounts, cash flow waterfall, and enforcement mechanisms, all structured within the framework of Indonesian law. It is commonly used for large-scale infrastructure projects, energy facilities, or other significant asset-based investments where project assets and revenues form the primary security package.

1. Parties: Identification of the lender(s) and borrower(s), including their full legal names and addresses

2. Background: Context of the loan, description of the project or assets being financed, and general purpose of the agreement

3. Definitions and Interpretation: Comprehensive definitions of terms used throughout the agreement and rules of interpretation

4. The Facility: Details of the loan facility, including amount, purpose, and availability period

5. Limited Recourse Nature: Clear specification of the limited recourse nature of the loan and extent of borrower's liability

6. Conditions Precedent: Conditions that must be satisfied before drawdown of the loan

7. Drawdown Mechanics: Procedures and requirements for drawing down the loan

8. Interest and Fees: Interest rate, calculation methods, payment dates, and applicable fees

9. Repayment and Prepayment: Repayment schedule, prepayment provisions, and mandatory prepayment events

10. Security Package: Description of security arrangements and secured assets/projects

11. Representations and Warranties: Standard and transaction-specific representations and warranties

12. Covenants: Positive and negative covenants, including project-specific undertakings

13. Events of Default: Circumstances constituting default and consequences

14. Enforcement and Remedies: Rights and remedies upon default, limited to secured assets

15. Changes to Parties: Transfer and assignment provisions

16. Administration: Administrative provisions including notices and calculations

17. Governing Law and Jurisdiction: Choice of Indonesian law and jurisdiction provisions