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The Pre-Financing Agreement is a fundamental document used in Indonesian financing transactions when parties need to establish preliminary terms for a financing arrangement before the main facility agreement. This document is particularly crucial in projects or ventures requiring substantial capital investment where detailed due diligence and conditions precedent need to be satisfied. The agreement, governed by Indonesian law and regulations, typically includes key terms such as facility amount, conditions for disbursement, basic security arrangements, and essential covenants. It serves as a bridge between initial financing discussions and the final facility agreement, providing both parties with legally binding commitments while allowing flexibility for detailed terms to be finalized. The document must comply with Indonesian Financial Services Authority (OJK) regulations and banking laws, making it essential for both financial institutions and borrowers to carefully consider their rights and obligations under this preliminary arrangement.

1. Parties: Identification of the financing institution and the recipient, including their complete legal names, registration numbers, and authorized representatives

2. Background: Context of the financing arrangement, purpose of the facility, and brief description of the underlying project or business requirement

3. Definitions: Detailed definitions of terms used throughout the agreement, including financial terms, technical terms, and references to Indonesian regulatory requirements

4. Facility Amount and Purpose: Specification of the pre-financing amount, currency, and detailed purpose for which the facility is being provided

5. Conditions Precedent: Prerequisites that must be satisfied before the facility becomes available, including required documents and regulatory approvals

6. Disbursement Mechanism: Procedures and requirements for drawing down the facility, including notice requirements and documentation

7. Interest and Fees: Details of interest rates, calculation methods, fee structures, and payment schedules

8. Repayment Terms: Terms and schedule for repayment, including prepayment provisions and consequences

9. Security and Collateral: Description of any security or collateral arrangements required for the facility

10. Representations and Warranties: Standard and specific representations and warranties from both parties

11. Covenants: Positive and negative undertakings by the recipient, including financial covenants and reporting requirements

12. Events of Default: Circumstances constituting default and consequences thereof

13. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and jurisdiction for dispute resolution

14. Miscellaneous: Standard boilerplate provisions including notices, amendments, and severability