Standardised Core Project Finance Loan Documents
Infrastructure Asia releases Singapore law-based standardised core project finance loan documents to optimise project financing.
1. Infrastructure Asia (InfraAsia) launched its Standardised Core Project Finance Loan Documents today. The initiative, which aims to make infrastructure projects more bankable and investable, was first announced by Minister Indranee Rajah, Minister in the Prime Minister’s Office and Second Minister for Finance and National Development, at the Asia Infrastructure Forum 2019.
2. Minister Indranee Rajah said, “One of the barriers to getting infrastructure projects off the ground in the region is the lack of standard project finance loan documentation. Customised standalone documents are time consuming and expensive to negotiate. Non-standard clauses also lack certainty and precedent value in the event of disputes. The standardisation of this core suite of project finance loan documents is an important step towards expediting and reducing the cost of project finance, and thereby narrowing the infrastructure investment gap for the region.”
3. The Standardised Core Project Finance Loan Documents, which are available on InfraAsia’s website, standardises 50 per cent of the terms in project finance documents. The remaining clauses will remain customisable to cater to specific project needs. The documents were drafted together with Clifford Chance and Allen & Gledhill, with the support of Asia Pacific Loan Market Association (APLMA).
4. In drafting the documents, industry feedback was gathered through two socialisation sessions. Conducted on 13 October 2020 and 3 November 2020 by InfraAsia, with the law firm partners and APLMA, these sessions were attended by over 50 ecosystem players including banks and project finance lawyers. Dispute resolution specialists were also consulted for their views on the governing law and enforcement clauses in the documents.
5. “This initiative is an important step towards creating a more efficient ecosystem for the deployment of capital into sustainable energy and infrastructure financing, by reducing the cost and effort spent on negotiating and finalising project finance loan documentation,” said Nicholas Wong, Partner and Co-Head of the Worldwide Projects Group at Clifford Chance.
6. “We hope that this set of documents can contribute to a more homogenous market for project finance loans and increase the chance of refinancing and even the securitisation of these loans, which may promote a more vibrant secondary market and encourage more involvement of non-bank capital,” said Kok Chee Wai, Partner at Allen & Gledhill.
7. The set of documents comprises the mandate letter, term sheet, and common terms agreement. It is based on APLMA’s Singapore law standard template documents. “APLMA is delighted to provide our standard Singapore law template as a base for drafting,” said Andrew Ferguson, CEO of APLMA, “our Singapore law template is very well recognised in the industry and should facilitate better adoption for the standardised documents”.
8. In 2021, InfraAsia will be organising workshops to familiarise potential users with the documents. We would like to encourage all participants in the project finance industry to reach out to us and explore how we can work together in utilising these documents to close the infrastructure financing gap in Asia.
9. The set of standardised project finance loan documents can be accessed through these links:
- English
- Chinese
- Vietnamese
About Infrastructure Asia
Infrastructure Asia (InfraAsia) aims to support Asia’s social and economic growth through infrastructure development. InfraAsia was established by Enterprise Singapore and Monetary Authority of Singapore to support infrastructure financing and development in the region. It does so through early project scoping, best practice sharing and brokering, harnessing Singapore’s best-in-class infrastructure ecosystem (international developers, engineering and professional services, along with financial institutions and multilateral development entities). It also works with global players in the regional infrastructure ecosystem and leverages the collective capabilities and networks of various government agencies to catalyse more trade and investments into infrastructure in the region.
