Document background
A Forward Funding Agreement is essential in property development projects where a funder agrees to finance a development project from its inception, rather than acquiring a completed asset. This document, governed by Indian law, is particularly crucial in large-scale development projects where traditional funding methods may not be suitable or sufficient. The agreement sets out the entire framework for the funding arrangement, including detailed provisions for drawdown conditions, development specifications, milestone payments, and project monitoring. It must comply with various Indian regulations, including RERA, FEMA (if foreign investment is involved), and relevant property laws. The document is typically used when investors or financial institutions want to secure development opportunities early while managing construction and development risks through careful structuring and monitoring provisions. It includes comprehensive provisions for protecting the funder's interests while ensuring the developer has sufficient flexibility to execute the project effectively.
