The signatories to this agreement are usually the lenders, the Project Company
and the Government.
It specifies the following:
• The order of payment of Foreign Exchange e.g. to creditors, Banks, etc. in order
of priority.
• Provision and timing of disbursement of funds in Foreign Exchange.
• The keeper of debt reserves.
• The holder of the monies for payment, in Foreign Exchange.
18.10.4 Sales/Purchase Agreement
In the setting-up of the configuration of a BOO-BOT project, depending on its
nature, such an Agreement may be required. A typical example is the case of a
BOT power project wherein the Project Company will sell the power produced to the
government-owned utility having jurisdiction on energy on a national level.
Or, alternatively, the Project Company may be required to buy from the Government itself or some other independent organisation the raw material for the production of the power.
Depending on the scenario, either a Sales or Purchase Agreement is entered into,
specifying, inter alia:
• The Principal source of revenue/cash flow for the project
• The performance standards to be achieved or adhered to by the Seller or the
Purchaser
• The Payment terms e.g. unit rate, take or pay provisions etc.
• The Price of the product
• The risk sharing provisions
• Issues pertaining to disputes and/or termination
18.10.5 Supply Agreement
The case may arise where the Project Company requires to be supplied with some
equipment or material or consumable such as fuel. This supplier may be either
private or public. A Supply Agreement is thus entered into by the two parties
concerned. It describes the following essential features:
• Quality of Supply
• Quantity of Supply
• Timing of the supply
• Rate of supply, and modalities thereof
• Points of delivery
18.10 Project Agreements
527
and the Government.
It specifies the following:
• The order of payment of Foreign Exchange e.g. to creditors, Banks, etc. in order
of priority.
• Provision and timing of disbursement of funds in Foreign Exchange.
• The keeper of debt reserves.
• The holder of the monies for payment, in Foreign Exchange.
18.10.4 Sales/Purchase Agreement
In the setting-up of the configuration of a BOO-BOT project, depending on its
nature, such an Agreement may be required. A typical example is the case of a
BOT power project wherein the Project Company will sell the power produced to the
government-owned utility having jurisdiction on energy on a national level.
Or, alternatively, the Project Company may be required to buy from the Government itself or some other independent organisation the raw material for the production of the power.
Depending on the scenario, either a Sales or Purchase Agreement is entered into,
specifying, inter alia:
• The Principal source of revenue/cash flow for the project
• The performance standards to be achieved or adhered to by the Seller or the
Purchaser
• The Payment terms e.g. unit rate, take or pay provisions etc.
• The Price of the product
• The risk sharing provisions
• Issues pertaining to disputes and/or termination
18.10.5 Supply Agreement
The case may arise where the Project Company requires to be supplied with some
equipment or material or consumable such as fuel. This supplier may be either
private or public. A Supply Agreement is thus entered into by the two parties
concerned. It describes the following essential features:
• Quality of Supply
• Quantity of Supply
• Timing of the supply
• Rate of supply, and modalities thereof
• Points of delivery
18.10 Project Agreements
527