Principles of Project Finance

result in its Project Company subsidiary or affiliate being made bankrupt as well,

or remove the benefit of a pledge of the Project Company’s shares. Depending on

the location of the project and Project Company, it may be necessary to insert an in-

termediary company between the Sponsor(s) and the Project Company to reduce

this risk.

§13.8 FINANCIAL CLOSE— CONDITIONS PRECEDENT

Signature of the financing documentation alone does not mean that the lend-

ers will start advancing funds to the Project Company. In order to draw down any

debt at all, the project must first reach Financial Close. This is the date at which

all Project Contracts and financing documentation have been signed, and the con-

ditions precedent to the effectiveness of the lenders’ commitments ...