Direct agreements are generally referred to as “tripartite agreements”, which reflects the fact that they are an agreement between three parties, i.e.: project agreement: The main agreement for each PFI project, the project agreement governs the relationship, rights and obligations between the Authority and Projectco for the duration of the project. It can also be called a concession contract. • the ability of lenders, during the registration period, to transfer the rights and obligations of the project company to a substitute company on a sustainable scale; and public authority guarantee agreements: these have proven to be an extension of the approach underlying the direct agreement between lenders. Administrative security agreements shall be concluded between the Authority and contractors concluding contracts with Projectco. The intention is that, if Projectco is in arrears in its obligations under the contract during the construction phase, the Authority can ensure that the project is completed by taking over the corresponding contract from Projectco. In addition, the Authority may take over Projectco`s operating contract at the end of the project. Where appropriate, a direct agreement may include clauses in which the counterparty to the project document agrees to the collection or assignment as security of the project company`s rights contained in the project document. Katie Liszka`s direct agreements are used in project finance operations to protect lenders in case of difficulties. These are contractual mechanisms that allow lenders to follow in the footsteps of the project company (the borrower) and take over the project and/or find a replacement unit to continue the project.
These rights are explained in direct agreements in the context of project financing transactions – key provisions. The designated representative may withdraw after notification. This is either when: a permanent replacement is found, the project is returned to the project company, or the lenders decide that the project cannot be saved. Again, there may be a debate about the extent of the appointed agent`s liability for non-compliance obligations. To enter, it is necessary to inform, during the period indicated, that the lenders have appointed a representative who intervenes and manages the project document. The third party then only has to deal with the designated representative and not with the project company. .