The Project Finance Agreement is a crucial document used in South Africa for structuring complex, large-scale project financing transactions. It serves as the primary agreement between lenders and the project company, detailing the terms and conditions of the financing arrangement. This document is essential when implementing major infrastructure, energy, mining, or other capital-intensive projects where financing is primarily based on project cash flows. The agreement must comply with South African legislation, including the Banks Act, Companies Act, and BEE requirements, while also addressing specific project risks and security arrangements. It typically involves multiple stakeholders and requires careful consideration of various aspects such as environmental compliance, technical feasibility, and financial viability.

1. Parties: Identification of all parties to the agreement including the borrower (project company), lenders, sponsors, and any guarantors

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

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

4. The Facility: Details of the loan facility including amount, purpose, and availability period

5. Conditions Precedent: Conditions that must be satisfied before drawdown, including technical, legal, and financial requirements

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

7. Interest and Fees: Interest calculation, payment provisions, and all applicable fees

8. Repayment and Prepayment: Repayment schedule, mandatory and voluntary prepayment provisions

9. Security: Details of all security arrangements and guarantees

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

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

12. Project Undertakings: Specific undertakings related to project construction, operation, and maintenance

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

14. Construction Phase Requirements: Specific requirements and milestones for the construction phase

15. Operation Phase Requirements: Requirements for project operation and maintenance

16. Insurance: Required insurance coverage and related provisions

17. Assignment and Transfer: Provisions regarding transfer of rights and obligations

18. Termination: Termination events and consequences

19. Governing Law and Jurisdiction: Choice of South African law and jurisdiction provisions

20. Boilerplate Clauses: Standard contract provisions including notices, amendments, and severability