Document background
A Sponsor Support Agreement is a fundamental document in project finance transactions in Indonesia, typically used when developing large-scale infrastructure, energy, or industrial projects. The agreement is essential when project lenders require additional comfort regarding the project company's financial stability and operational capabilities. The document outlines the sponsors' commitments to support the project through various means, including additional equity injections, cost overrun support, or technical assistance. Under Indonesian law, these agreements must comply with local regulatory requirements, particularly regarding foreign investment restrictions, currency controls, and banking regulations. The agreement becomes especially critical in limited-recourse financing structures where the project's success heavily depends on sponsor support during both construction and operational phases.
