If necessary, a direct agreement may contain clauses in which the counterparty to the project document consents to the collection or assignment as security of the project company`s rights under the project document. One question that can be negotiated intensively is what lenders are responsible for when they intervene. They shall be responsible for any unpaid payments and undiled obligations of which they will be informed. The extent to which they assume responsibility for unknown and unreported liabilities is often controversial. Lenders will only want to be liable for liabilities that are informed. The third party who agrees to intervene will obviously want the lenders to be responsible for everything. Direct agreements usually contain provisions on the following topics: As a general rule, there is no discussion as to whether a direct agreement should be concluded in principle. However, it is still common for some provisions to be negotiated intensively, and it often seems that disproportionate time is spent on such a short agreement. To my knowledge, no one has ever intervened under a direct agreement, and there would be practical difficulties in doing so, such as.

B the novification of all project contracts. However, direct agreements are common practice and are an integral part of a lender`s overall security rights. Direct agreements are also commonly referred to as “tripartite agreements”, reflecting the fact that it is an agreement between three parties, i.e. a direct agreement is an agreement that gives project lenders direct rights over certain important project documents. These rights are explained in direct agreements in project financing transactions – key provisions. In early PFI projects, it was common to have separate agreements for different phases of the project, such as. B, a development agreement for the design and construction phase and an operation or facilities management agreement for the operation phase. Nowadays, however, it is more common to have a single project agreement that covers all aspects of the project.

In addition to this certainty, project finance lenders generally expect direct contractual relationships with counterparties on key project documents. This is achieved through direct agreements. By Katie Liszka Direct agreements are used in project financing transactions to provide protection to lenders in case the project gets into trouble. These are contractual mechanisms that allow lenders to follow in the footsteps of the project company (borrower) and take over the project and/or find a replacement unit to continue the project. The parties to the direct agreement include the project company itself and the counterparty of the project document for which the direct agreement constitutes a guarantee. ]]Financing >: The Facility Agreement is the main document between the lenders and Projectco and sets out the terms of the financing of the project. . . .