Principles of Project Finance

ment (temporarily or permanently). If requirements are to be fulfilled later

(e.g., obtaining an operating permit), this may be covered in the covenants (cf.

§13.10).

For its own protection, the Project Company may wish to exclude responsibil-

ity for “immaterial” errors in its representations and warranties (e.g., if a parking

ticket for the plant manager’s car has not been paid, does this mean the Project

Company is not in compliance with the law?). Lenders are unlikely to accept any

significant watering down of their requirement for the Project Company to take

full responsibility for the basis behind the financing.

The Sponsors themselves may also be required to provide similar represen-

tations and warranties directly to the lenders; if so, the debt ...