guarantor to take over an asset on
which an insurance claim or guaran-
tee has been paid. See §7.6.4;
§11.3.4; §11.4.1
subsovereign risks Risks relating to
a public-sector body other than the
Host Government. See §10.7.2
substitution Right under a Direct
Agreement for the lenders to substi-
tute a new entity to take over the
Project Company’s rights and obli-
gations under a Project Contract.
See §7.7
Support Services Agreement A
contract between the Project Com-
pany and one or more Sponsors to
provide back-up technical support,
spare parts, etc. See §8.7.2
swap provider A bank providing an
interest rate swap to the Project
Company. See §9.2.1; §13.13.1
syndication The process by which
the Lead Managers reduce their un-
derwriting by placing part of the
loan with other banks. See §5.1.7
synthetic lease A form of lease
(mainly in the United States) in
which ownership of the equipment
remains with the lessee for tax pur-
poses, but with the lessor for ac-
counting purposes. See §3.4
TA Technical Adviser. See Lenders’
tail Continuing project revenues after
repayment of the debt; cf. reserve
tail. See §12.9.4; §13.2
Take-and-pay contract A contract
under which the purchaser pays an
agreed price for the product pur-
chased, but is not obliged to pur-
chase. See §6.1.1; §7.3.1
Take-or-pay contract A contract
Glossary and Abbreviations 343
under which the purchaser must buy
the product or make a payment in
lieu. See §6.1.1; §7.3.1
target repayments A flexible repay-
ment structure to allow for tempo-
rary cash flow deficiencies. See
Tariff Payments under a Project
Agreement; see Availability Charge
and Variable Charge, or Unitary
Charge. See §6.1.5: §6.1.6
term Duration of a Project Contract
or the period until the final repay-
ment date of the debt. See §6.3;
term sheet Heads of terms for the
project finance. See §5.1.6
Termination Sum The compensa-
tion payable by the Offtaker or Con-
tracting Authority for the early ter-
mination of a Project Agreement.
See §6.8
Third-Party Liability Insurance In-
surance against damage or injury
caused by the project to third par-
ties. See §7.6.1; §7.6.2
third-party risks Risks that failures
by parties not involved with the
Project Contracts may affect the
completion or operation of the proj-
ect. See §8.5.8; §8.9.1; §8.9.5
Throughput Contract A Project
Agreement for the use of a pipeline.
See §6.1.1
tied financing See export credits.
Tolling Contract An Input Supply
Contract in which the fuel or raw
material is supplied free, and the
Project Company is paid for pro-
cessing it. See §7.3.1
Transportation Contract See
Throughput Contract.

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