Sponsor Support Agreement Template for Nigeria

The Sponsor Support Agreement serves as a critical document in Nigerian project finance transactions, providing additional security and comfort to lenders by establishing legally binding obligations for project sponsors to provide financial support under specified circumstances. This agreement becomes particularly important in the Nigerian context where projects often require substantial financial backing and must navigate complex regulatory requirements, including foreign investment restrictions and local content rules. The document typically outlines support mechanisms such as equity contributions, debt service undertakings, or contingent funding obligations, while ensuring compliance with Nigerian corporate and banking laws. Used primarily in large-scale infrastructure and development projects, the Sponsor Support Agreement helps bridge potential funding gaps and provides additional project security, making it an essential tool for project bankability in the Nigerian market.

1. Parties: Identification of the sponsor(s), project company, and security trustee/agent (if applicable)

2. Background: Context of the project, relationship between parties, and purpose of the support agreement

3. Definitions and Interpretation: Key terms used throughout the agreement, including financial definitions and technical terms

4. Support Obligations: Core section detailing the sponsor's commitments, including funding obligations and support mechanisms

5. Trigger Events: Circumstances that activate the sponsor's support obligations

6. Payment Mechanics: Procedures and timeframes for providing financial support, including payment instructions

7. Representations and Warranties: Standard and specific representations by the sponsor regarding capacity, authority, and financial condition

8. Covenants: Ongoing obligations of the sponsor, including maintenance of financial capacity and reporting requirements

9. Duration and Termination: Term of the agreement and circumstances allowing early termination

10. Tax Gross-up and Indemnities: Provisions for tax-related costs and general indemnification obligations

11. Assignments and Transfers: Restrictions and conditions for transferring rights under the agreement

12. Notices: Communication procedures between parties

13. Governing Law and Jurisdiction: Choice of Nigerian law and jurisdiction provisions

14. Miscellaneous: Standard boilerplate provisions including severability, amendments, and counterparts