Project Finance Contract for Hong Kong

Project Finance Contract Template for Hong Kong

A comprehensive financing agreement governed by Hong Kong law that structures the funding, implementation, and operation of large-scale projects through a project finance model. The document establishes the terms and conditions for providing limited-recourse financing, where lenders primarily rely on the project's cash flows for repayment. It incorporates Hong Kong's regulatory requirements, including those under the Securities and Futures Ordinance and Companies Ordinance, while detailing the security package, financial covenants, project undertakings, and risk allocation mechanisms specific to the Hong Kong legal framework.

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What is a Project Finance Contract?

The Project Finance Contract is a sophisticated financing instrument used in Hong Kong for funding major capital-intensive projects where lenders rely primarily on project assets and cash flows rather than the sponsors' credit. This document is essential when implementing large infrastructure, energy, or development projects that require structured financing solutions. It operates within Hong Kong's legal framework, incorporating requirements from various ordinances including securities, companies, and environmental regulations. The contract typically includes detailed provisions for project implementation, security arrangements, financial covenants, and risk allocation, tailored to comply with Hong Kong law while meeting international project finance standards. It's particularly relevant for projects requiring long-term financing where risk sharing and complex security arrangements are crucial elements.

What sections should be included in a Project Finance Contract?

1. Parties: Identification of all contracting parties including project company, lenders, sponsors, and key contractors

2. Background: Context of the project finance transaction and key objectives

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

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

5. Conditions Precedent: Prerequisites that must be satisfied before drawdown of funds

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

7. Interest and Fees: Interest calculations, rates, and all applicable fees

8. Repayment Terms: Repayment schedule, prepayment provisions, and payment mechanics

9. Security Structure: Overview of security package and collateral arrangements

10. Project Undertakings: Key project implementation and operation commitments

11. Financial Covenants: Financial ratios and tests to be maintained

12. Representations and Warranties: Standard and project-specific representations

13. Events of Default: Circumstances constituting default and consequences

14. Agent and Security Trustee Provisions: Roles and responsibilities of agents and security trustees

15. Boilerplate Provisions: Standard legal provisions including notices, amendments, governing law

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

1. Syndication Provisions: Required when multiple lenders are involved, covering voting rights and facility transfers

2. Construction and Development: Needed when project includes construction phase, detailing construction obligations and monitoring

3. Government Support: Include when project requires specific government approvals or support

4. Environmental and Social Requirements: Detailed environmental obligations when project has significant environmental impact

5. Insurance: Detailed insurance requirements for complex projects

6. Direct Agreements: Step-in rights and direct agreements with key project participants

7. Intercreditor Provisions: Required when multiple classes of debt are involved

8. Employment Matters: Include when project involves significant employment considerations

What schedules should be included in a Project Finance Contract?

1. Project Description: Detailed technical description of the project

2. Form of Drawdown Request: Standard form for requesting drawdowns

3. Repayment Schedule: Detailed amortization schedule

4. Security Documents: List and forms of all security documents

5. Financial Model: Agreed base case financial model and assumptions

6. Required Insurance: Detailed insurance requirements and specifications

7. Form of Progress Reports: Template for regular project progress reporting

8. Key Project Documents: Copies or summaries of material project contracts

9. Permitted Investments: List of approved investments for project funds

10. Technical Requirements: Detailed technical specifications and standards

11. Environmental and Social Action Plan: Required environmental and social compliance measures

12. Forms of Certificates: Standard forms for various required certificates

Authors

Alex Denne

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

Jurisdiction

Hong Kong

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions
Account Bank
Acquisition Price
Additional Facility
Affiliate
Agent
Agreed Form
Agreement
Applicable Law
Authorized Representative
Available Commitment
Available Facility
Base Case Financial Model
Borrower
Break Costs
Business Day
Cash Flow Available for Debt Service
Change of Control
Completion Date
Commitment
Compliance Certificate
Conditions Precedent
Construction Budget
Construction Contract
Construction Period
Cost Overrun
Cost to Complete
Debt Service Coverage Ratio
Debt Service Reserve Account
Default
Default Interest
Designated Account
Direct Agreement
Disposal
Distribution
Drawdown Date
Drawdown Notice
Eligible Bank
Environmental Law
Environmental Permit
Event of Default
Facility
Facility Agreement
Facility Office
Fee Letter
Final Maturity Date
Finance Documents
Finance Parties
Financial Close
Financial Indebtedness
Financial Model
Financial Year
Force Majeure Event
Good Industry Practice
Government Agency
Guarantee
Hedging Agreement
HIBOR
Holdings
Hong Kong
Increased Costs
Independent Engineer
Information Memorandum
Insurance Advisor
Insurance Proceeds
Intellectual Property Rights
Interest Payment Date
Interest Period
Lender
LIBOR
Loan
Majority Lenders
Margin
Material Adverse Effect
O&M Agreement
O&M Contractor
Operating Budget
Operating Costs
Operating Period
Party
Permitted Disposal
Permitted Distribution
Permitted Financial Indebtedness
Permitted Security
Project
Project Accounts
Project Assets
Project Company
Project Costs
Project Documents
Project Facilities
Project Insurance
Project Revenues
Project Site
Qualifying Bank
Quotation Day
Reference Banks
Relevant Jurisdiction
Repayment Date
Repayment Schedule
Secured Obligations
Secured Parties
Security
Security Documents
Security Interest
Security Period
Security Trust Deed
Security Trustee
Sponsor
Subordinated Debt
Subsidiary
Tax
Technical Advisor
Technical Description
Term
Transaction Documents
Transfer Certificate
Trust Property
Utilization
Utilization Date
Warranty
Clauses
Relevant Industries

Infrastructure

Energy and Utilities

Real Estate Development

Transportation

Telecommunications

Mining and Natural Resources

Industrial Development

Healthcare Infrastructure

Waste Management

Renewable Energy

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Project Management

Commercial

Corporate Development

Investment

Due Diligence

Credit Risk

Capital Markets

Operations

Relevant Roles

Chief Financial Officer

Finance Director

Project Finance Manager

Legal Counsel

Project Director

Risk Manager

Investment Manager

Compliance Officer

Commercial Director

Treasury Manager

Contract Manager

Financial Controller

Project Manager

Corporate Finance Director

Senior Banker

Investment Analyst

Legal Director

Due Diligence 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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