Project Finance Loan Agreement Template for United Arab Emirates

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Project Finance Loan Agreement Template

I need a Project Finance Loan Agreement Template for a UAE solar power project with a total facility value of AED 500 million, incorporating both conventional and Islamic finance tranches, with expected financial close in March 2025.

Document background
This Project Finance Loan Agreement Template is specifically designed for use in the United Arab Emirates legal framework, providing a comprehensive structure for financing large-scale projects across various sectors. It serves as the primary financing document in project finance transactions, incorporating both conventional and Islamic finance principles where necessary. The template includes essential provisions required under UAE law, including compliance with UAE Federal Law No. 18 of 1993 (Commercial Transactions Law), UAE Central Bank regulations, and relevant emirate-specific legislation. It is particularly suited for complex infrastructure and development projects where financing is primarily secured by the project's assets and cash flows. The document covers all crucial aspects of project financing, including detailed security arrangements, drawdown mechanisms, project monitoring requirements, and specific provisions for UAE market practices.
Suggested Sections

1. Parties: Identification of the lender(s), borrower(s), and any other key parties such as security agents or facility agents

2. Background: Description of the project, purpose of the facility, and key commercial context

3. Definitions and Interpretation: Comprehensive definitions of terms used in the agreement and rules of interpretation

4. The Facility: Details of the loan facility, including amount, purpose, and availability period

5. Conditions Precedent: Conditions that must be satisfied before drawdown, including technical, legal, and financial requirements

6. Drawdown Procedures: Process and requirements for requesting and making loan disbursements

7. Repayment and Prepayment: Terms for scheduled repayments, mandatory and voluntary prepayments

8. Interest and Fees: Interest calculation, payment periods, default interest, and all applicable fees

9. Tax Provisions: Allocation of tax liabilities and gross-up provisions

10. Representations and Warranties: Standard and project-specific representations by the borrower

11. Information Covenants: Requirements for financial and project-related reporting

12. Financial Covenants: Financial ratios and tests to be maintained by the borrower

13. General Undertakings: Positive and negative covenants relating to the borrower's conduct

14. Project Undertakings: Specific covenants relating to the construction and operation of the project

15. Events of Default: Circumstances constituting default and consequences

16. Security: Overview of security package and enforcement rights

17. Changes to Parties: Provisions regarding assignment, transfer, and syndication

18. Administration: Role and duties of facility agent and other administrative provisions

19. Payments and Application of Payments: Payment mechanics and waterfall provisions

20. Governing Law and Jurisdiction: Choice of UAE law and jurisdiction provisions

Optional Sections

1. Islamic Finance Provisions: Required when the facility includes Islamic finance tranches, including Sharia-compliant structures

2. Intercreditor Provisions: Required when multiple lenders or classes of debt are involved

3. Political Risk Insurance: Required when political risk insurance is part of the security package

4. Environmental and Social Requirements: Required when project involves significant environmental or social impacts

5. Export Credit Agency Provisions: Required when export credit agencies are involved in the financing

6. Currency Provisions: Required when the facility involves multiple currencies

7. Technical Advisor Provisions: Required when independent technical advisors have ongoing monitoring roles

8. Step-in Rights: Required when lenders need direct project control rights in certain circumstances

Suggested Schedules

1. Form of Drawdown Request: Standard form for requesting loan disbursements

2. Conditions Precedent Documents: Detailed list of required documents and conditions

3. Project Documents: List and copies of key project contracts and permits

4. Security Documents: Forms of security documents and security perfection requirements

5. Financial Model: Agreed base case financial model and sensitivity scenarios

6. Repayment Schedule: Detailed amortization schedule

7. Form of Transfer Certificate: Standard form for transferring loan participations

8. Technical Specifications: Detailed project technical requirements and specifications

9. Insurance Requirements: Required insurance coverage and terms

10. Form of Compliance Certificate: Template for periodic compliance reporting

11. Construction Schedule: Detailed project construction milestones and timeline

12. Environmental and Social Management Plan: Required environmental and social compliance measures

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Energy and Utilities

Infrastructure

Real Estate Development

Industrial and Manufacturing

Oil and Gas

Renewable Energy

Transportation

Healthcare

Education

Telecommunications

Water and Waste Management

Mining and Natural Resources

Petrochemicals

Tourism and Hospitality

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Project Management

Corporate Banking

Investment Banking

Credit Risk

Islamic Banking

Transaction Management

Business Development

Corporate Finance

Operations

Technical Advisory

Relevant Roles

Chief Financial Officer

Legal Counsel

Finance Director

Project Finance Manager

Corporate Lawyer

Investment Manager

Risk Manager

Compliance Officer

Project Director

Treasury Manager

Banking Relationship Manager

Contract Manager

Transaction Manager

Islamic Finance Specialist

Senior Banker

Credit Risk Officer

Investment Analyst

Project Manager

Business Development Director

Financial Controller

Industries
UAE Federal Law No. 18 of 1993 (Commercial Transactions Law): Governs commercial transactions including loans, guarantees, and banking operations. Essential for structuring the basic loan provisions and commercial security arrangements.
UAE Federal Law No. 14 of 2018 (UAE Central Bank Law): Regulates banking activities and financial institutions in the UAE. Crucial for ensuring compliance with banking regulations and licensing requirements.
UAE Federal Law No. 2 of 2015 (Commercial Companies Law): Relevant for understanding the legal structure of the borrower and any project companies, including foreign ownership restrictions and corporate governance requirements.
UAE Federal Law No. 20 of 2016 (Pledge of Movable Properties as Security for Debt): Critical for creating security interests over movable assets in project finance transactions.
UAE Federal Law No. 4 of 2000 (Capital Markets Law): Relevant if the project financing involves any capital market instruments or listed securities.
UAE Federal Law No. 10 of 1980 (Central Bank Law) and its amendments: Contains provisions regarding interest rates and banking operations, crucial for structuring the financial aspects of the agreement.
UAE Civil Code (Federal Law No. 5 of 1985): Provides the fundamental principles of contract law, including formation, interpretation, and enforcement of contracts.
UAE Federal Law No. 19 of 2018 (Foreign Direct Investment Law): Important for understanding foreign investment restrictions and permissions in project finance transactions involving foreign lenders or investors.
Dubai Law No. 14 of 2009 (Mortgage Law): Specific to Dubai, governs real estate mortgage transactions which may be relevant for project finance involving real estate assets.
UAE Federal Law No. 6 of 2018 (Arbitration Law): Important for dispute resolution provisions in the loan agreement, especially given the international nature of many project finance transactions.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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