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The Project Finance Agreement is a fundamental document used in financing major infrastructure and development projects in Indonesia. It is particularly relevant when implementing large-scale projects that require substantial capital investment and involve multiple stakeholders. The agreement structures the financing on a limited-recourse basis, where lenders primarily rely on the project's cash flows for repayment. The document must comply with Indonesian law requirements, including Law No. 25 of 2007 on Investment and various sector-specific regulations. A Project Finance Agreement typically includes detailed provisions on facility terms, security arrangements, conditions precedent, covenants, and event of default, while addressing specific Indonesian regulatory requirements such as language requirements, governing law provisions, and mandatory local law provisions. The document is essential for projects requiring long-term financing across various sectors including infrastructure, energy, and natural resources.

1. Parties: Identification of all parties to the agreement including lenders, borrowers, sponsors, and any guarantors

2. Background: Context of the project financing, project description, and purpose of the facility

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

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

5. Conditions Precedent: Conditions that must be satisfied before drawdown, including permits, authorizations, and document requirements

6. Drawdown: Procedures and requirements for utilization of the facility

7. Repayment: Terms of repayment including schedule, prepayment provisions, and mandatory prepayment events

8. Interest and Fees: Interest calculation, payment periods, default interest, and all applicable fees

9. Security: Security package details, including creation and perfection requirements under Indonesian law

10. Representations and Warranties: Standard and project-specific representations and warranties

11. Covenants: Positive, negative, and financial covenants applicable to the project and borrower

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

13. Changes to Parties: Provisions regarding assignments, transfers, and changes in facility participants

14. Administration: Administrative provisions including payment mechanics and calculations

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

16. Notices: Communication procedures and contact details

17. Execution: Signature blocks and execution formalities compliant with Indonesian law