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Project Finance Agreement Template for Singapore

A Project Finance Agreement under Singapore law is a comprehensive financing document that establishes the terms and conditions for providing limited-recourse financing to a specific project. It incorporates Singapore's robust legal framework, including the Companies Act and Banking Act, while addressing specific requirements for security, environmental compliance, and project implementation. The agreement typically includes detailed provisions for drawdown conditions, repayment terms, security arrangements, and project monitoring requirements.

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What is a Project Finance Agreement?

The Project Finance Agreement is a cornerstone document used when implementing large-scale infrastructure, energy, or development projects in Singapore or the broader Asian region. It provides a detailed framework for limited-recourse financing, where lenders primarily rely on project cash flows for repayment. Under Singapore law, the agreement must comply with local banking regulations, securities laws, and environmental requirements while incorporating international best practices. The document typically includes comprehensive provisions covering facility terms, security structures, conditions precedent, representations and warranties, covenants, and events of default.

What sections should be included in a Project Finance Agreement?

1. Parties: Identification and details of all contracting parties including project company, lenders, sponsors, and security agents

2. Background/Recitals: Context of the project and financing arrangement, including project overview and financing purpose

3. Definitions: Key terms used throughout the agreement, including project-specific and financing terms

4. Facility Amount and Purpose: Details of financing amount, tranches if applicable, and permitted uses of the facility

5. Conditions Precedent: Prerequisites for drawdown including required documents, permits, and approvals

6. Repayment Terms: Payment schedule, interest calculations, fees, and repayment mechanisms

7. Security Structure: Details of collateral, security arrangements, and ranking of security interests

8. Representations and Warranties: Standard and project-specific assurances from borrower and sponsors

9. Covenants: Financial and operational obligations of the borrower, including maintenance of permits and compliance

10. Events of Default: Circumstances triggering default and consequences thereof

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

1. Intercreditor Provisions: Provisions governing relationships between multiple lenders, including voting rights and payment waterfall

2. Step-in Rights: Provisions allowing lenders to take control of project in specific circumstances

3. Political Risk Insurance: Requirements for political risk coverage and related obligations

4. Force Majeure: Provisions dealing with extraordinary events affecting project implementation

5. Environmental and Social Requirements: Specific environmental and social compliance obligations

What schedules should be included in a Project Finance Agreement?

1. Schedule 1 - Project Documents: List and copies of key project contracts and agreements

2. Schedule 2 - Security Documents: Details of security arrangements, including forms of security documents

3. Schedule 3 - Financial Model: Agreed form of financial model and key assumptions

4. Schedule 4 - Drawdown Schedule: Detailed timeline and conditions for facility drawdown

5. Schedule 5 - Form of Notices: Standard forms for drawdown notices, compliance certificates, and other communications

6. Schedule 6 - Insurance Requirements: Detailed insurance requirements and minimum coverage levels

7. Schedule 7 - Environmental and Social Action Plan: Specific environmental and social compliance requirements and timelines

Authors

Alex Denne

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

Jurisdiction

Singapore

Publisher

Ƶ

Document Type

Finance Agreement

Cost

Free to use

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