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Project Finance Agreement for India

Project Finance Agreement Template for India

A comprehensive legal agreement governed by Indian law that establishes the terms and conditions for providing project financing to a specific venture. The document outlines the lending arrangement, security structure, drawdown mechanisms, repayment terms, and various covenants while ensuring compliance with Indian banking and financial regulations. It includes detailed provisions for project monitoring, risk allocation, default scenarios, and remedy mechanisms, along with specific requirements for environmental compliance and necessary governmental approvals under Indian jurisdiction.

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Project Finance Agreement

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What is a Project Finance Agreement?

The Project Finance Agreement is a crucial document used in India for structuring complex financing arrangements for large-scale projects. It serves as the primary agreement between lenders and the project company, detailing the terms of financing, security arrangements, and operational requirements. The agreement must comply with Indian banking regulations, corporate laws, and sector-specific requirements while incorporating international best practices in project finance. This document is particularly important for infrastructure and industrial projects where financing is secured primarily through project assets and cash flows rather than sponsor balance sheets. The Project Finance Agreement typically works in conjunction with various other project documents and security agreements to create a comprehensive financing structure that protects lenders' interests while enabling project execution.

What sections should be included in a Project Finance Agreement?

1. Parties: Identification of all parties to the agreement including project company, lenders, sponsors, and security trustees

2. Background: Context of the project, purpose of financing, and overview of the transaction structure

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

4. Facility and Purpose: Details of the financing facility, amounts, tranches, and permitted uses of funds

5. Conditions Precedent: Conditions that must be satisfied before funding can be drawn

6. Drawdown Procedures: Process and requirements for drawing down the facility

7. Repayment and Prepayment: Terms of repayment, scheduling, and voluntary/mandatory prepayment provisions

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

9. Security Structure: Overview of security package and ranking of security interests

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

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

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

13. Monitoring and Reporting Requirements: Regular reporting obligations and lender monitoring rights

14. Dispute Resolution: Procedures for resolving disputes including jurisdiction and arbitration

15. Governing Law: Specification of Indian law as governing law and related provisions

16. Miscellaneous: Standard boilerplate provisions including notices, amendments, and assignments

What sections are optional to include in a Project Finance Agreement?

1. Intercreditor Provisions: Required when multiple lenders or classes of debt are involved, defining relationships between different classes of lenders

2. Step-in Rights: Included when lenders require direct ability to take control of the project in distress situations

3. Political Risk Protection: Necessary for projects with significant exposure to political risks or government actions

4. Environmental and Social Requirements: Detailed section required for projects with significant environmental or social impacts

5. Insurance Requirements: Detailed insurance section when project requires specific insurance coverage beyond standard requirements

6. Government Support Provisions: Required when project relies on government guarantees or support

7. Foreign Exchange Provisions: Necessary when project involves multiple currencies or foreign exchange risks

8. Export Credit Agency Provisions: Required when export credit agencies are involved in the financing

What schedules should be included in a Project Finance Agreement?

1. Schedule 1 - Project Description: Detailed technical description of the project and its components

2. Schedule 2 - Drawing Schedule: Detailed drawdown schedule and milestone-linked disbursements

3. Schedule 3 - Form of Drawdown Notice: Standard form for requesting drawdowns

4. Schedule 4 - Repayment Schedule: Detailed amortization schedule for each facility

5. Schedule 5 - Security Documents: List and copies of all security documents

6. Schedule 6 - Financial Covenants Calculations: Detailed methodology for calculating financial covenants

7. Schedule 7 - Construction Schedule: Detailed construction milestones and timeline

8. Schedule 8 - Required Permits: List of all required permits and their status

9. Schedule 9 - Technical Standards: Applicable technical standards and specifications

10. Schedule 10 - Form of Reports: Templates for various required reports

11. Schedule 11 - Insurance Requirements: Detailed insurance requirements and specifications

12. Schedule 12 - Financial Model: Base case financial model and assumptions

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

India

Publisher

Ƶ

Document Type

Finance Agreement

Cost

Free to use
Relevant legal definitions
















































































Clauses












































Relevant Industries

Infrastructure

Power & Energy

Transportation

Real Estate

Mining

Oil & Gas

Telecommunications

Healthcare

Manufacturing

Renewable Energy

Ports & Shipping

Aviation

Water & Sanitation

Industrial Parks

Smart Cities

Relevant Teams

Legal

Finance

Project Management

Risk Management

Compliance

Treasury

Credit

Corporate Finance

Business Development

Operations

Technical

Investment Banking

Strategy

Corporate Secretarial

Relevant Roles

Chief Financial Officer

Finance Director

Project Finance Manager

Legal Counsel

Corporate Lawyer

Project Manager

Risk Manager

Compliance Officer

Investment Banking Director

Infrastructure Finance Specialist

Senior Banker

Credit Risk Manager

Treasury Manager

Contract Manager

Business Development Director

Financial Controller

Company Secretary

Managing Director

Chief Executive Officer

Project Development Manager

Industries










Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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