Interdisciplinary Studies in the Humanities

The nature of project finance; Identification of hierarchy in the chain of the contracts and co-ordination and reconsideration of the diverse interests

Document Type : Original Research Paper

Authors

S. Kasnavi 1
S. N. Ebrahimi 2
M. Bagheri 2

1 Department of Law, Faculty of Law and Political Sciences, University of Tehran, Tehran, Iran

2 Department of Law, Faculty of Law and Plitical Sciences, University of Tehran, Tehran, Iran

https://doi.org/10.22035/isih.2021.3951.4058
Abstract
Financing sources used in infrastructure project is not merely equity capital, it is rather more debt capital. One of the most practical method in this regard is project finance. Because of two inherent characteristics of project finance- high leverage and non-recourse - it's necessary to consider special contractual rights for lenders. The existence of these rights and taking control over the project lead to high interdependence and nexuses of contract to the extent that we can assert the existence of contractual network in project finance. Contractual networks as a separate nature consider more flexibility to draft project contracts and can help to absorb more investment.

Keywords

Project finance
nexuses of contracts
vertical integration
contractual network

Subjects

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  • Receive Date 25 June 2020
  • Revise Date 30 November 2020
  • Accept Date 03 February 2021

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