Project Finance Agreement for the United States

Project Finance Agreement Template for United States

A Project Finance Agreement is a comprehensive legal document used in the United States that establishes the terms and conditions for financing large-scale infrastructure or development projects through project finance structures. It details the rights and obligations of all parties, including sponsors, lenders, and other stakeholders, while incorporating specific U.S. regulatory requirements and state-specific provisions. The agreement typically covers financing terms, security arrangements, conditions precedent, representations and warranties, covenants, and events of default.

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What is a Project Finance Agreement?

The Project Finance Agreement serves as the primary financing document in complex project finance transactions within the United States legal framework. It is typically used for large-scale infrastructure, energy, or development projects where financing is primarily based on project cash flows rather than sponsor balance sheets. The agreement incorporates specific provisions required under U.S. federal and state laws, including securities regulations, environmental requirements, and industry-specific compliance matters. It provides a comprehensive framework for project implementation, risk allocation, security arrangements, and ongoing project management.

What sections should be included in a Project Finance Agreement?

1. Parties: Identification of all parties to the agreement including sponsors, lenders, and other key stakeholders

2. Background: Project overview, purpose, and context of the financing arrangement

3. Definitions: Comprehensive list of defined terms used throughout the agreement

4. Facility Details: Terms of the financing facility including amount, purpose, and drawdown conditions

5. Security Structure: Details of security package and collateral arrangements

6. Representations and Warranties: Standard and project-specific representations from borrower

7. Covenants: Positive, negative, and financial covenants

8. Events of Default: Circumstances constituting default and remedies

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

1. Intercreditor Provisions: Required provisions governing relationships between multiple lenders and their respective rights and obligations

2. Political Risk Insurance: Provisions related to political risk insurance coverage and requirements for international projects

3. Environmental and Social Requirements: Specific environmental and social obligations for projects with significant environmental impact

What schedules should be included in a Project Finance Agreement?

1. Schedule 1 - Project Documents: Key contracts and agreements related to the project

2. Schedule 2 - Financial Model: Detailed financial projections and assumptions

3. Schedule 3 - Construction Schedule: Timeline of project construction milestones

4. Schedule 4 - Form of Security Documents: Templates for security agreements and guarantees

5. Schedule 5 - Insurance Requirements: Required insurance coverage details

6. Schedule 6 - Environmental and Social Management Plan: Detailed environmental and social compliance requirements

7. Schedule 7 - Form of Drawdown Request: Template for requesting disbursements

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

United States

Publisher

Genie AI

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Industries

Securities Acts: Securities Act of 1933 and Securities Exchange Act of 1934 - Regulate securities offerings, trading, and establish disclosure requirements for public offerings

Investment Company Act: Investment Company Act of 1940 - Regulates investment vehicles and may be applicable if the project involves investment company structures

Federal Power Act: Governs the transmission and sale of electric power, particularly relevant for energy infrastructure projects

Environmental Framework: Includes National Environmental Policy Act (NEPA), Clean Air Act, Clean Water Act, and EPA regulations - Essential for environmental compliance and permits

Foreign Investment Regulations: CFIUS requirements and FIRRMA - Govern foreign investment in US projects and national security reviews

State Securities Laws: Blue Sky Laws - State-specific securities regulations that complement federal securities laws

State-Specific Regulations: Including state environmental regulations, licensing requirements, corporate laws, property laws, and security interest laws (UCC Article 9)

FERC Regulations: Federal Energy Regulatory Commission regulations governing energy projects and public utility matters

Infrastructure Regulations: Transportation regulations and public-private partnership laws applicable to infrastructure projects

Real Estate Laws: Zoning laws and land use regulations affecting project development and implementation

Banking Regulations: Federal Reserve Regulations, Bank Secrecy Act, Anti-Money Laundering regulations, and Dodd-Frank Act provisions

Tax Framework: Internal Revenue Code, state/local tax laws, and applicable tax credit programs affecting project finance structures

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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