Document background
The Sponsor Support Agreement serves as a critical document in South African project finance transactions, providing additional security and comfort to lenders by establishing legally binding support obligations from project sponsors. This agreement becomes particularly important in large-scale infrastructure, energy, and resource projects where project revenues alone may not provide sufficient security for lenders. The document details various forms of support, including cost overrun funding, working capital support, and completion undertakings, while ensuring compliance with South African regulatory requirements, including the Companies Act, Financial Advisory and Intermediary Services Act, and exchange control regulations. The agreement typically works in conjunction with other project finance documents and may be required by lenders as a condition precedent to financial close.
