Book contents
- Frontmatter
- Contents
- Preface to the Third Edition
- Preface to the Second Edition
- Preface to the First Edition
- PART ONE AN INTRODUCTION TO PROJECT FINANCE
- PART TWO RISK IDENTIFICATION, ALLOCATION, AND MITIGATION
- PART THREE PROJECT FINANCE STRUCTURES
- PART FOUR TECHNICAL, POLITICAL, AND ECONOMIC FEASIBILITY
- PART FIVE PROJECT FINANCE DOCUMENTATION
- PART SIX CREDIT ENHANCEMENT
- PART SEVEN DEBT AND EQUITY FINANCING
- PART EIGHT COLLATERAL
- PART NINE PROJECT SPONSOR AND INVESTOR AGREEMENTS
- CHAPTER TWENTY-SEVEN GOVERNING THE PROJECT COMPANY: STOCKHOLDER, PARTNERSHIP, JOINT VENTURE, AND MANAGEMENT AGREEMENTS
- PART TEN SPECIAL TOPICS IN PROJECT FINANCE
- Appendix A A Checklist of Due Diligence Considerations for a Project Financing
- Appendix B UNCITRAL Legislative Guide on Privately Financed Infrastructure Projects
- Project Finance Terms, Abbreviations, and Acronyms
- Select Bibliography
- Index
CHAPTER TWENTY-SEVEN - GOVERNING THE PROJECT COMPANY: STOCKHOLDER, PARTNERSHIP, JOINT VENTURE, AND MANAGEMENT AGREEMENTS
from PART NINE - PROJECT SPONSOR AND INVESTOR AGREEMENTS
Published online by Cambridge University Press: 05 June 2012
- Frontmatter
- Contents
- Preface to the Third Edition
- Preface to the Second Edition
- Preface to the First Edition
- PART ONE AN INTRODUCTION TO PROJECT FINANCE
- PART TWO RISK IDENTIFICATION, ALLOCATION, AND MITIGATION
- PART THREE PROJECT FINANCE STRUCTURES
- PART FOUR TECHNICAL, POLITICAL, AND ECONOMIC FEASIBILITY
- PART FIVE PROJECT FINANCE DOCUMENTATION
- PART SIX CREDIT ENHANCEMENT
- PART SEVEN DEBT AND EQUITY FINANCING
- PART EIGHT COLLATERAL
- PART NINE PROJECT SPONSOR AND INVESTOR AGREEMENTS
- CHAPTER TWENTY-SEVEN GOVERNING THE PROJECT COMPANY: STOCKHOLDER, PARTNERSHIP, JOINT VENTURE, AND MANAGEMENT AGREEMENTS
- PART TEN SPECIAL TOPICS IN PROJECT FINANCE
- Appendix A A Checklist of Due Diligence Considerations for a Project Financing
- Appendix B UNCITRAL Legislative Guide on Privately Financed Infrastructure Projects
- Project Finance Terms, Abbreviations, and Acronyms
- Select Bibliography
- Index
Summary
GENERALLY
A project company is often owned by more than one entity. This may be due to a need to combine several project participants, each with differing financial, management, operational, and technical resources and skills to develop a successful project. For example, one project participant could have excellent experience and skill in construction of the planned facility but no knowledge about the long-term market risks associated with the facility's output.
The need for large equity contributions in infrastructure projects may require that several companies unite to pool resources. The amount of equity that is required for a project, coupled with the political and other risks involved in the project, could strain the funding abilities of any one participant.
The decision to collaborate may also be based in a need to share equity ownership with local investors in the host country. In some countries, local law requires that a domestic equity partner must be included with foreign investors in a project. Irrespective of local law requirements, a local partner is often important to the success of a project, because if that entity is commercially experienced and well connected, it can help reduce political risks.
Aside from these necessities for multiple partner involvement, the addition of new equity participants increases the complexity of ownership. Each equity participant may have different investment goals for the capital contributed.
- Type
- Chapter
- Information
- The Law and Business of International Project FinanceA Resource for Governments, Sponsors, Lawyers, and Project Participants, pp. 385 - 386Publisher: Cambridge University PressPrint publication year: 2007