Infrastructure means the facilities and the physical structure required to develop a particular area and operate the economy and the society. It presents a basic framework needed to facilitate all the movements and development of any county’s economy. So it’s important to invest in a project which is called infrastructure project financing. There are many projects on which financing is done, such as roads, highways, airports, ports, bridges, industrial parks, sanitation, broadband connection, internet setup, telecommunication system. These projects are related to the development of any particular Nation.
Contractual Structure Of project Finance
Many contracts are involved in the project, such as purchase contracts, government contracts, sponsor contracts, and project Co, designed in networks of different agreements. There is a key loan agreement between banks and the project company and the security structure. There is also a hedging arrangement and the underline contractual documents with the project contractors and ultimately the purchasing agreements with the project’s purchaser.
In the early period, the government handled the infrastructure projects, and no private contractors were involved. Private contractors company’ involved later due to lack of capital, low-quality service, and slow development. To operate project public, private partnership model involved between private contractors and government.