In fact, many of these agreements are also included in normal, government
funded contacts, except that for BOT projects, there is probably a need (or feeling)
for higher security.
18.10.1 Concession Agreement/Implementation Agreement
The two signatories of this document are the government and the project company.
It specifies the terms and conditions under which the project company would be
set up, and those of the project implementation, inter alia:
• Equity package
• Debt package
• Insurance sources and provisions
• Government guarantees and commitments
• Tariff structure
• Transfer provisions
It is usually a bulky document and inexperienced governments/utilities should
inevitably obtain expert guidance in its preparation from qualified firms,
18.10.2 Shareholders Agreement
This Agreement will specify the terms and conditions of the investment agreed upon
by the equity participants. Normally this is a private document for the private sector
investors. It will, inter alia, elaborate upon:
• Agreement between Investors
• Initial and Possible Future Options for Investors
• The rights and obligations of the Investors
• The timing and obligations of the equity contribution from the equity participants
• Possibility and modalities of transfer of shares
• Any Audit provisions
• The formation and operation of the Project Company.
18.10.3 Escrow Agreement
As explained in para. 18.9.9, in a BOT project, the Foreign Exchange aspects, and
the associated Escrow Account Arrangement provisions are usually specified in the
document termed the “Escrow Agreement”.
526
18 Infrastructure Markets and the Private Sector