An acceptance agreement is an agreement between the project company and the buyer (the party that purchases the product/service that the project produces/provides). In the case of project financing, revenues are often contracted (instead of being sold on a market basis). The purchase agreement regulates the mechanism of price and volume of revenues. The objective of this agreement is to provide the project company with stable and sufficient revenues to settle its project debt obligation, cover operating costs and provide proponents with some necessary return. An agreement with common conditions is a legal agreement that consists of two parts. One party requests financial assistance or loans for a given project, and the other provides that financial assistance. CTA ensures that the agreement is concluded between the borrower and the lender. The second part can be a financial institution. This agreement includes the provision for repayment and the cost of acquiring debts. Both parties agree with the clauses mentioned in the CTA regarding the project account, conditions, voting rights in relation to the changes, etc. The identification and allocation of risks is an essential element of project financing.

A project may be subject to a number of technical, environmental, economic and political risks, particularly in developing and emerging countries. Financial institutions and project promoters may conclude that the risks associated with the development and operation of projects are unacceptable (non-financial). “Several long-term contracts, such as construction, supply, purchase and concession contracts, as well as a large number of condominium structures, are used to create incentives and discourage opportunistic behavior from parties involved in the project.” [3] Implementation templates are sometimes referred to as “project resolution methods”. Funding for these projects must be distributed among several parties in order to spread the risk associated with the project while ensuring profits for each party involved. The establishment of these risk allocation mechanisms makes it more difficult to manage the risks associated with developing countries` infrastructure markets, as their markets present higher risks. [4] For example, Acme Coal imports coal. Energen Inc. provides energy to consumers. The two companies agree to build a power plant to achieve their respective goals. Typically, the first step would be to sign a memorandum of understanding to set out the intentions of both parties. It would be followed by an agreement to create a joint venture.

Project funding documents almost always contain an agreement with common conditions and should always include it….