Project Financing for Hydropower - Revision history

Wiki Gardener at 14:25, 19 March 2015

2015-03-19T14:25:41Z

Wiki Gardener at 14:25, 19 March 2015

2015-03-19T14:25:13Z

Ranisha at 13:58, 25 August 2014

2014-08-25T13:58:59Z

Ranisha at 09:32, 14 August 2014

2014-08-14T09:32:01Z

Ranisha: /* Overview */

2014-07-08T09:52:38Z

Overview

Wiki Gardener at 15:06, 24 July 2013

2013-07-24T15:06:25Z

Show changes

Fungai Cecilia Sandamu: Fungai Cecilia Sandamu moved page Project Financing (Ratna Sansar Shrestha, FCA) to Project Financing for Hydropower without leaving a redirect

2013-07-12T11:14:04Z

Fungai Cecilia Sandamu moved page Project Financing (Ratna Sansar Shrestha, FCA) to Project Financing for Hydropower without leaving a redirect

Tai Becker at 09:24, 1 September 2011

2011-09-01T09:24:13Z

Tai Becker at 13:58, 26 August 2011

2011-08-26T13:58:54Z

Tai Becker at 13:58, 26 August 2011

2011-08-26T13:58:42Z

@@ Line 27: / Line 27: @@
 At another extreme of the financing spectrum is borrowing the full amount of the cost of the project. But such a scenario is also rare. Such borrowing is possible where the developer is able to provide full collateral, including an adequate margin against the loan, or enjoys a high credit rating and is able to borrow against its balance sheet, or is able to provide a third party guarantee, including guarantee of the parent company. From the standpoint of exposure, in this scenario too, the developer or the surety of the developer’s parent company is exposed to the full risk of the project. A prudent businessperson will also stay away from this type of financing.<br/>However, when we are discussing debt financing, different concepts related to "debt" have to be considered. The term, "debt", is generally used interchangeably with loan, but there are a number of instruments available for the purpose and there are a number of different types of debts or loans.
+== Unsecured Debt ==
 Generally, a borrower who enjoys high credit rating is able to borrow without providing any security in the form of collateral or guarantee from its parent company or third party. Such borrowing is known as unsecured loan. Financial institutions rely on the credit rating of the borrower based on its balance sheet in providing unsecured loan. Large, financially strong corporate undertakings are able to borrow without putting up collateral or providing other forms of security.
+== Secured Debt ==
 Where a lender provides loan to a borrower on the basis of security furnished by the borrower, the debt is secured. Security against a loan may be perfected in several ways. The oldest form of security for the purpose of borrowing is pledging real property (even precious metal) as collateral. One may mortgage landed property in one’s ownership in order to borrow. In such an instance, a lender will be willing to advance a loan up to the value of such property minus a margin. An illustration is borrowing up to, say, 60 per cent of the value of land to construct a building on that land. In this instance, one real property is being mortgaged to create another real property. Another version of secured loan is where the lender keeps the title to the property procured with the loan as collateral. This happens in ‘lease purchase’. Here also, the margin will come to play in the form of a down payment from the borrower. In both of these scenarios, the lender is able to resort to the lien property in case of default by the borrower.
@@ Line 41: / Line 41: @@
 Security for a loan can also be perfected without putting up real property as collateral. Financial institutions lend money against third party guarantee; a parent company can also stand guarantee for the loan taken by its subsidiary. In the event of default by the borrower, the loan and other amounts due in respect to such a loan will be recovered by the lender from such a guarantor.
+<br/>
 = Project Finance =
@@ Line 47: / Line 47: @@
 ‘Project Finance’ can be described as lending money for a project by accepting the ‘project’ itself as the collateral so that the lender is enabled to step into the shoes of the borrower to continue with the project, whether under construction or in operation, in the event of default of lenders’ terms, conditions and covenants by the borrower. This is basically a way of perfecting security of a debt without having to put up collateral or furnish third party guarantee. It can also be described as a mix of debt and equity financing or ‘an instrument to perfect security of debt. This kind of financing can be loosely compared with ‘hire-purchase’, as the collateral for such financing is the item being procured under the scheme. However, project finance is distinct from hire-purchase because the assets procured under the latter scheme are registered in the lender’s name and repossession of the said asset, as a part of foreclosure, is rather simple while not so in the former. The exposure of both the developer and the lender is in proportion to their investment, essentially as per the debt to equity ratio. Moreover, the margin is available to the lender based on the debt to equity ratio.
+<br/>
 = Mechanisms and Mechanics of Perfecting Security under Project Finance =
@@ Line 82: / Line 82: @@
 *Have such agreement ‘registered’ wherein all tangible and intangible (various contracts, agreements, license, etc.) assets are mortgaged against the loan, enabling the lender to foreclose without having to resort to court of law.<br/>
+<br/>
 = Further Information =
@@ Line 97: / Line 97: @@
 <references />
 [[Category:Hydro]]

@@ Line 1: / Line 1: @@
 [[Portal:Hydro|►Back to Hydro Portal]]
 = Overview<br/> =
-{| cellspacing="1" cellpadding="1" border="1" style="width: 756px; width: 756px; height: 43px"
+{| cellspacing="1" cellpadding="1" border="1" style="width: 756px;  width: 756px;  height: 43px"
 |-
-| bgcolor="#cccccc" | '''This is part of a condensed report on the Small Hydropower Promotion Projct (SHPP). For an overview on the whole report please refer to following page: '''[[Small_Hydropower_Promotion_Project_(SHPP)_Nepal_Report|SHPP Report.]]
+| bgcolor="#cccccc" | '''This is part of a condensed report on the Small Hydropower Promotion Projct (SHPP). For an overview on the whole report please refer to following page: ''''''[[Small_Hydropower_Promotion_Project_(SHPP)_Nepal_Report|SHPP Report.]]'''
 |}
@@ Line 14: / Line 15: @@
 <br/>
-== Equity Finance ==
+= Equity Finance =
 Pure equity financing of a hydropower project is a rarity, especially because this sector is capital-intensive with a long gestation period. But it is not unthinkable. Full equity financing of a hydropower project is basically applicable in the case of a private sector flush with funds, not needing to borrow from anywhere else. Literally, in this context, financing involves using or investing own funds to construct or erect a project.
@@ Line 20: / Line 21: @@
 In the case of equity-finance the investor will solely be exposed to the full risk of the project. The developer’s exposure will be limited if s/he is able to leverage non-recourse fund from lenders. Moreover, return on equity generally tends to be higher, depending upon the extent of leverage gained by higher ‘debt to equity’ ratio if the rate of return on total investment is higher than the rate of the interest on loan.
-[[Project_Financing_for_Hydropower#toc|►Go to Top]]<br/>
+<br/>
-== Debt Financing ==
+= Debt Financing =
 At another extreme of the financing spectrum is borrowing the full amount of the cost of the project. But such a scenario is also rare. Such borrowing is possible where the developer is able to provide full collateral, including an adequate margin against the loan, or enjoys a high credit rating and is able to borrow against its balance sheet, or is able to provide a third party guarantee, including guarantee of the parent company. From the standpoint of exposure, in this scenario too, the developer or the surety of the developer’s parent company is exposed to the full risk of the project. A prudent businessperson will also stay away from this type of financing.<br/>However, when we are discussing debt financing, different concepts related to "debt" have to be considered. The term, "debt", is generally used interchangeably with loan, but there are a number of instruments available for the purpose and there are a number of different types of debts or loans.
-=== Unsecured Debt ===
 Generally, a borrower who enjoys high credit rating is able to borrow without providing any security in the form of collateral or guarantee from its parent company or third party. Such borrowing is known as unsecured loan. Financial institutions rely on the credit rating of the borrower based on its balance sheet in providing unsecured loan. Large, financially strong corporate undertakings are able to borrow without putting up collateral or providing other forms of security.
-=== Secured Debt ===
 Where a lender provides loan to a borrower on the basis of security furnished by the borrower, the debt is secured. Security against a loan may be perfected in several ways. The oldest form of security for the purpose of borrowing is pledging real property (even precious metal) as collateral. One may mortgage landed property in one’s ownership in order to borrow. In such an instance, a lender will be willing to advance a loan up to the value of such property minus a margin. An illustration is borrowing up to, say, 60 per cent of the value of land to construct a building on that land. In this instance, one real property is being mortgaged to create another real property. Another version of secured loan is where the lender keeps the title to the property procured with the loan as collateral. This happens in ‘lease purchase’. Here also, the margin will come to play in the form of a down payment from the borrower. In both of these scenarios, the lender is able to resort to the lien property in case of default by the borrower.
@@ Line 40: / Line 41: @@
 Security for a loan can also be perfected without putting up real property as collateral. Financial institutions lend money against third party guarantee; a parent company can also stand guarantee for the loan taken by its subsidiary. In the event of default by the borrower, the loan and other amounts due in respect to such a loan will be recovered by the lender from such a guarantor.
-== Project Finance ==
 ‘Project Finance’ can be described as lending money for a project by accepting the ‘project’ itself as the collateral so that the lender is enabled to step into the shoes of the borrower to continue with the project, whether under construction or in operation, in the event of default of lenders’ terms, conditions and covenants by the borrower. This is basically a way of perfecting security of a debt without having to put up collateral or furnish third party guarantee. It can also be described as a mix of debt and equity financing or ‘an instrument to perfect security of debt. This kind of financing can be loosely compared with ‘hire-purchase’, as the collateral for such financing is the item being procured under the scheme. However, project finance is distinct from hire-purchase because the assets procured under the latter scheme are registered in the lender’s name and repossession of the said asset, as a part of foreclosure, is rather simple while not so in the former. The exposure of both the developer and the lender is in proportion to their investment, essentially as per the debt to equity ratio. Moreover, the margin is available to the lender based on the debt to equity ratio.
-== Mechanisms and Mechanics of Perfecting Security under Project Finance ==
 The following factors must be considered in the loaning of money on project finance basis for a hydropower project in order to perfect security:
 <u>'''Revenue: watertight arrangement for commercial operation during debt service period'''</u>
 *PPA: Assign it to the lender(s) with the Nepal Electricity Authority’s (NEA) consent.
 *Ensure that the revenue stream received from NEA is directed to a bank account specified by the lender. NEA will have to be approached for their concurrence.
@@ Line 61: / Line 63: @@
 <u>'''Expenditure: watertight arrangement during construction period'''</u>
 *Assign all contracts or agreements, inter alia, related to construction, supply, transportation, erection or installation, consultancies (design, engineering, supervision, etc.) to the lenders so that they are able to continue to complete implementation and operation of the project in the case of borrower default by being able to step into the shoes of the borrower or have someone do so on the lender’s behalf. (Should even include employment contracts of key personnel that are indispensable for the implementation of the project!)
 *Ensure that the borrower company’s equity-holders inject their equity, at least, on pari passu basis, if not more, during the implementation of the project.
@@ Line 70: / Line 73: @@
 '''<u>Safety-net: success or failure dependent on robust and sturdy safety-net of insurance</u>'''
 *Risk assessment should be made to prepare a risk profile, which will dictate the insurance program.
 *Ensure that all necessary insurance policies are put in place in order to cover all exposures to all possible risks (e.g., CAR, EAR, TAR, ALOP, increase in cost due to devaluation, contractors’ equipment, third party liability, comprehensive workmen’s compensation, professional liability and so on and so forth). The words of the proposed insurance policies are to be finalized in consultation with the lender.
@@ Line 78: / Line 82: @@
 *Have such agreement ‘registered’ wherein all tangible and intangible (various contracts, agreements, license, etc.) assets are mortgaged against the loan, enabling the lender to foreclose without having to resort to court of law.<br/>
-*[[Small Hydropower Promotion Project (SHPP) Nepal Report|Nepal Report SHPP Report]]
+= Further Information =
 *[[Portal:Financing_and_Funding|Financing and Funding portal on energypedia]]<br/>
 <br/>
-== References ==
+= References =
 <references />
 [[Category:Financing_Hydropower]]

@@ Line 1: / Line 1: @@
 [[Portal:Hydro|►Back to Hydro Portal]]
@@ Line 21: / Line 20: @@
 In the case of equity-finance the investor will solely be exposed to the full risk of the project. The developer’s exposure will be limited if s/he is able to leverage non-recourse fund from lenders. Moreover, return on equity generally tends to be higher, depending upon the extent of leverage gained by higher ‘debt to equity’ ratio if the rate of return on total investment is higher than the rate of the interest on loan.
-[[Project_Financing_for_Hydropower#Overview|►Go to Top]]<br/>
+[[Project_Financing_for_Hydropower#toc|►Go to Top]]<br/>
 == Debt Financing ==
@@ Line 27: / Line 26: @@
 At another extreme of the financing spectrum is borrowing the full amount of the cost of the project. But such a scenario is also rare. Such borrowing is possible where the developer is able to provide full collateral, including an adequate margin against the loan, or enjoys a high credit rating and is able to borrow against its balance sheet, or is able to provide a third party guarantee, including guarantee of the parent company. From the standpoint of exposure, in this scenario too, the developer or the surety of the developer’s parent company is exposed to the full risk of the project. A prudent businessperson will also stay away from this type of financing.<br/>However, when we are discussing debt financing, different concepts related to "debt" have to be considered. The term, "debt", is generally used interchangeably with loan, but there are a number of instruments available for the purpose and there are a number of different types of debts or loans.
-[[Project_Financing_for_Hydropower#Overview|►Go to Top]]
+[[Project_Financing_for_Hydropower#toc|►Go to Top]]
 === Unsecured Debt ===
@@ Line 33: / Line 32: @@
 Generally, a borrower who enjoys high credit rating is able to borrow without providing any security in the form of collateral or guarantee from its parent company or third party. Such borrowing is known as unsecured loan. Financial institutions rely on the credit rating of the borrower based on its balance sheet in providing unsecured loan. Large, financially strong corporate undertakings are able to borrow without putting up collateral or providing other forms of security.
-[[Project_Financing_for_Hydropower#Overview|►Go to Top]]
+[[Project_Financing_for_Hydropower#toc|►Go to Top]]
 === Secured Debt ===
@@ Line 41: / Line 40: @@
 Security for a loan can also be perfected without putting up real property as collateral. Financial institutions lend money against third party guarantee; a parent company can also stand guarantee for the loan taken by its subsidiary. In the event of default by the borrower, the loan and other amounts due in respect to such a loan will be recovered by the lender from such a guarantor.
-[[Project_Financing_for_Hydropower#Overview|►Go to Top]]
+[[Project_Financing_for_Hydropower#toc|►Go to Top]]
 == Project Finance ==
@@ Line 47: / Line 46: @@
 ‘Project Finance’ can be described as lending money for a project by accepting the ‘project’ itself as the collateral so that the lender is enabled to step into the shoes of the borrower to continue with the project, whether under construction or in operation, in the event of default of lenders’ terms, conditions and covenants by the borrower. This is basically a way of perfecting security of a debt without having to put up collateral or furnish third party guarantee. It can also be described as a mix of debt and equity financing or ‘an instrument to perfect security of debt. This kind of financing can be loosely compared with ‘hire-purchase’, as the collateral for such financing is the item being procured under the scheme. However, project finance is distinct from hire-purchase because the assets procured under the latter scheme are registered in the lender’s name and repossession of the said asset, as a part of foreclosure, is rather simple while not so in the former. The exposure of both the developer and the lender is in proportion to their investment, essentially as per the debt to equity ratio. Moreover, the margin is available to the lender based on the debt to equity ratio.
-[[Project_Financing_for_Hydropower#Overview|►Go to Top]]
+[[Project_Financing_for_Hydropower#toc|►Go to Top]]
 == Mechanisms and Mechanics of Perfecting Security under Project Finance ==
@@ Line 79: / Line 78: @@
 *Have such agreement ‘registered’ wherein all tangible and intangible (various contracts, agreements, license, etc.) assets are mortgaged against the loan, enabling the lender to foreclose without having to resort to court of law.<br/>
-[[Project_Financing_for_Hydropower#Overview|►Go to Top]]
+[[Project_Financing_for_Hydropower#toc|►Go to Top]]
 == Further Information ==
@@ Line 92: / Line 91: @@
 <references />
 [[Category:Hydro]]

@@ Line 1: / Line 1: @@
 = Overview<br/> =
@@ Line 20: / Line 21: @@
 In the case of equity-finance the investor will solely be exposed to the full risk of the project. The developer’s exposure will be limited if s/he is able to leverage non-recourse fund from lenders. Moreover, return on equity generally tends to be higher, depending upon the extent of leverage gained by higher ‘debt to equity’ ratio if the rate of return on total investment is higher than the rate of the interest on loan.
-<br/>
+[[Project_Financing_for_Hydropower#Overview|►Go to Top]]<br/>
 == Debt Financing ==
@@ Line 26: / Line 27: @@
 At another extreme of the financing spectrum is borrowing the full amount of the cost of the project. But such a scenario is also rare. Such borrowing is possible where the developer is able to provide full collateral, including an adequate margin against the loan, or enjoys a high credit rating and is able to borrow against its balance sheet, or is able to provide a third party guarantee, including guarantee of the parent company. From the standpoint of exposure, in this scenario too, the developer or the surety of the developer’s parent company is exposed to the full risk of the project. A prudent businessperson will also stay away from this type of financing.<br/>However, when we are discussing debt financing, different concepts related to "debt" have to be considered. The term, "debt", is generally used interchangeably with loan, but there are a number of instruments available for the purpose and there are a number of different types of debts or loans.
-<br/>
+[[Project_Financing_for_Hydropower#Overview|►Go to Top]]
 === Unsecured Debt ===
@@ Line 32: / Line 33: @@
 Generally, a borrower who enjoys high credit rating is able to borrow without providing any security in the form of collateral or guarantee from its parent company or third party. Such borrowing is known as unsecured loan. Financial institutions rely on the credit rating of the borrower based on its balance sheet in providing unsecured loan. Large, financially strong corporate undertakings are able to borrow without putting up collateral or providing other forms of security.
-<br/>
+[[Project_Financing_for_Hydropower#Overview|►Go to Top]]
 === Secured Debt ===
@@ Line 40: / Line 41: @@
 Security for a loan can also be perfected without putting up real property as collateral. Financial institutions lend money against third party guarantee; a parent company can also stand guarantee for the loan taken by its subsidiary. In the event of default by the borrower, the loan and other amounts due in respect to such a loan will be recovered by the lender from such a guarantor.
-<br/>
+[[Project_Financing_for_Hydropower#Overview|►Go to Top]]
 == Project Finance ==
@@ Line 46: / Line 47: @@
 ‘Project Finance’ can be described as lending money for a project by accepting the ‘project’ itself as the collateral so that the lender is enabled to step into the shoes of the borrower to continue with the project, whether under construction or in operation, in the event of default of lenders’ terms, conditions and covenants by the borrower. This is basically a way of perfecting security of a debt without having to put up collateral or furnish third party guarantee. It can also be described as a mix of debt and equity financing or ‘an instrument to perfect security of debt. This kind of financing can be loosely compared with ‘hire-purchase’, as the collateral for such financing is the item being procured under the scheme. However, project finance is distinct from hire-purchase because the assets procured under the latter scheme are registered in the lender’s name and repossession of the said asset, as a part of foreclosure, is rather simple while not so in the former. The exposure of both the developer and the lender is in proportion to their investment, essentially as per the debt to equity ratio. Moreover, the margin is available to the lender based on the debt to equity ratio.
-<br/>
+[[Project_Financing_for_Hydropower#Overview|►Go to Top]]
 == Mechanisms and Mechanics of Perfecting Security under Project Finance ==
@@ Line 78: / Line 79: @@
 *Have such agreement ‘registered’ wherein all tangible and intangible (various contracts, agreements, license, etc.) assets are mortgaged against the loan, enabling the lender to foreclose without having to resort to court of law.<br/>
-<br/>
+[[Project_Financing_for_Hydropower#Overview|►Go to Top]]
 == Further Information ==
-*[[Small_Hydropower_Promotion_Project_(SHPP)_Nepal_Report|Nepal Report SHPP Report]]
+*[[Small Hydropower Promotion Project (SHPP) Nepal Report|Nepal Report SHPP Report]]
 <br/>
@@ Line 91: / Line 93: @@
 [[Category:Hydro]]

@@ Line 1: / Line 1: @@
 = Overview<br/> =
-{| cellspacing="1" cellpadding="1" border="1" style="width: 756px;  width: 756px;  height: 43px"
+{| cellspacing="1" cellpadding="1" border="1" style="width: 756px; width: 756px; height: 43px"
 |-
-| bgcolor="#cccccc" | '''This is part of a condensed report on the Small Hydropower Promotion Projct (SHPP). For an overview on the whole report please refer to following page: '''[[SHPP Nepal Report|SHPP Report.]]
+| bgcolor="#cccccc" | '''This is part of a condensed report on the Small Hydropower Promotion Projct (SHPP). For an overview on the whole report please refer to following page: '''[[Small_Hydropower_Promotion_Project_(SHPP)_Nepal_Report|SHPP Report.]]
 |}
@@ Line 11: / Line 12: @@
 Financing hydropower projects involves getting the money and investing it in the implementation of the project. Largely, this holds true if such a project is being implemented as a government project or grant-funded project. This aspect can be deemed to be project financed in a wider sense.<br/>On the other hand if a hydropower project is to be constructed and operated with private funds and/or as a business proposition it needs to worry about a number of other issues (risks) inherent to these kinds of activities. Moreover, an entrepreneur should worry about recovery of the investment with a decent return therein as well as servicing of the debt if any debt financing is involved. This approach is much more challenging as well as interesting besides being timely in view of liberalisation, privatisation and globalisation. Therefore, let us examine various issues with respect to such financing by considering a number of financing scenarios.
+<br/>
 == Equity Finance ==
@@ Line 19: / Line 20: @@
 In the case of equity-finance the investor will solely be exposed to the full risk of the project. The developer’s exposure will be limited if s/he is able to leverage non-recourse fund from lenders. Moreover, return on equity generally tends to be higher, depending upon the extent of leverage gained by higher ‘debt to equity’ ratio if the rate of return on total investment is higher than the rate of the interest on loan.
+<br/>
 == Debt Financing ==
@@ Line 25: / Line 26: @@
 At another extreme of the financing spectrum is borrowing the full amount of the cost of the project. But such a scenario is also rare. Such borrowing is possible where the developer is able to provide full collateral, including an adequate margin against the loan, or enjoys a high credit rating and is able to borrow against its balance sheet, or is able to provide a third party guarantee, including guarantee of the parent company. From the standpoint of exposure, in this scenario too, the developer or the surety of the developer’s parent company is exposed to the full risk of the project. A prudent businessperson will also stay away from this type of financing.<br/>However, when we are discussing debt financing, different concepts related to "debt" have to be considered. The term, "debt", is generally used interchangeably with loan, but there are a number of instruments available for the purpose and there are a number of different types of debts or loans.
+<br/>
 === Unsecured Debt ===
@@ Line 45: / Line 46: @@
 ‘Project Finance’ can be described as lending money for a project by accepting the ‘project’ itself as the collateral so that the lender is enabled to step into the shoes of the borrower to continue with the project, whether under construction or in operation, in the event of default of lenders’ terms, conditions and covenants by the borrower. This is basically a way of perfecting security of a debt without having to put up collateral or furnish third party guarantee. It can also be described as a mix of debt and equity financing or ‘an instrument to perfect security of debt. This kind of financing can be loosely compared with ‘hire-purchase’, as the collateral for such financing is the item being procured under the scheme. However, project finance is distinct from hire-purchase because the assets procured under the latter scheme are registered in the lender’s name and repossession of the said asset, as a part of foreclosure, is rather simple while not so in the former. The exposure of both the developer and the lender is in proportion to their investment, essentially as per the debt to equity ratio. Moreover, the margin is available to the lender based on the debt to equity ratio.
+<br/>
 == Mechanisms and Mechanics of Perfecting Security under Project Finance ==
@@ Line 77: / Line 78: @@
 *Have such agreement ‘registered’ wherein all tangible and intangible (various contracts, agreements, license, etc.) assets are mortgaged against the loan, enabling the lender to foreclose without having to resort to court of law.<br/>
+<br/>
 == Further Information ==
-*[https://energypedia.info/SHPP Nepal Report SHPP Report]
+*[[Small_Hydropower_Promotion_Project_(SHPP)_Nepal_Report|Nepal Report SHPP Report]]
 == References ==

@@ Line 60: / Line 60: @@
 *Payments for construction closely supervised by lenders.
-== Safety-net: success or failure dependent on robust and sturdy safety-net of insurance ==
+'''<u>Safety-net: success or failure dependent on robust and sturdy safety-net of insurance</u>'''
 *Risk assessment should be made to prepare a risk profile, which will dictate the insurance program.

@@ Line 50: / Line 50: @@
 *Allow the developer to withdraw money from the account for the distribution of dividend to its shareholders, to the extent permissible based on fund balance in the escrow account after leaving an amount necessary to meet one (or the unit agreed between the borrower and lender) debt service obligation in immediate future.
-=== Expenditure: watertight arrangement during construction period ===
+<u>'''Expenditure: watertight arrangement during construction period'''</u>
 *Assign all contracts or agreements, inter alia, related to construction, supply, transportation, erection or installation, consultancies (design, engineering, supervision, etc.) to the lenders so that they are able to continue to complete implementation and operation of the project in the case of borrower default by being able to step into the shoes of the borrower or have someone do so on the lender’s behalf. (Should even include employment contracts of key personnel that are indispensable for the implementation of the project!)