The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:
The main project parties in a typical project finance transaction are:
the project vehicle (referred to in this Practice Note as the 'project company') which is typically the borrower of the project loans
contractors and sub-contractors
The main finance parties in a typical project finance transaction are explained in Practice Note: Project finance—key finance parties.
The sponsor is the party which manages the project.
The sponsor is typically:
the government of the country in which the project is located (the host government), or
a private company (or group of companies)
Governments (or governmental authorities) tend to be the sponsor in projects involving public services eg infrastructure (roads, rail, ports etc) or social facilities (schools, hospitals, prisons etc).
Private companies tend to be the sponsor in projects which are designed to exploit resources eg oil, gas and mining.
Even where a host government is not involved in initiating a project, it often has an important role to play in making a project viable—see Host government.
In some types of projects, a consortium of sponsors collaborates to deliver a project together. The consortium might include entities with complementary skills eg building contractors, facility managers and service providers.
One of the key functions of the sponsor is to provide initial investment in the project to get the project
**excludes LexisPSL Practice Compliance, Practice Management and Risk and Compliance. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
Take a free trial
0330 161 1234