The stakeholders in project financings are the sponsor(s), the customer or host country government ceding agency, the debt and equity investors, the project company, the offtaker or user of the project company's output, and the supplier of production inputs to the project company. Other project participants are external advisors and consultants, the construction contractor, the technology and equipment provider, the export credit agency (ECA) of equipment origin and multilateral agencies, and the operations and management (O&M) company. The sponsor's or developer's project team usually consists of the project manager under a project executive and representatives from sales and marketing, the CFO and treasury, business development, engineering and technology, legal, and the project finance organization (PFO) that draws from internal and external groups to perform necessary functions.

In infrastructure projects there are numerous tasks that need to be performed, and several participants with different interests, objectives, and project finance skills and experiences; as well as an overlap of roles and responsibilities carried out over complex and lengthy processes. Different projects require different assignment of participant roles and responsibilities that vary by sponsor, host country government authority, and organizational and project finance capabilities. Hence, the need for clearly delineated roles and assigned responsibilities to the project core project team and other participants. Besides a clear specification of roles and responsibilities, a key requirement is coordination of tasks and cooperation and collaboration to produce required deliverables to move the project forward.

To appreciate the need for the project participants' roles to coalesce with the responsibilities of the core project team, Figure 7.1 helps to conceptualize the required coordination to incorporate their outputs and deliverables into the overall project finance process. A complete inventory of project participant roles and functions is lengthy and requires superior project management skills and a PFO capable of helping the project manager coordinate internal and external processes, activities, and deliverables.

In the sections that follow, the roles and responsibilities of participants are logged in sufficient detail to give a good picture of the effort involved in the monumental task of coordinating participant outputs into the project team main process. The undertakings, events, and activities associated with each participant's charter and how participants carry out their responsibilities are shown in the sections that follow: Section7.1 deals with the project team and its roles; Section 7.2 discusses the roles of the host government; and Section 7.3 addresses the many roles of the project sponsor(s).

Section 7.4 reviews the roles of the project company while Section 7.5 describes the crucial roles of the project lenders, and Section 7.6 lists the roles of different external advisors and consultants. Section 7.7 shows the roles of unilateral and multilateral institutions,Section 7.8 enumerates the roles of the engineering, procurement, and construction (EPC) contractor and Section 7.9 identifies the roles of the technology and equipment providers.

Section 7.10 discusses the roles of the project company's offtaker and suppliers and lastly, Section 7.11 deals with the roles of the O&M company.

7.1 ROLES OF THE PROJECT TEAM

Project leadership is usually vested to a sponsor company senior executive with industry experience, ability, and resources to complete a project successfully. The senior executive is usually the head of a business unit or a member of the company's senior management team. The project team is headed by the project manager who reports to the project executive and plays a key role in developing and seeing a project to its completion. The project team consists of the PFO and subteams with new business development, engineering and technology, sales and marketing, finance and accounting, legal, market research and competitive analysis, and strategic project forecasting experiences. It also includes representatives from other participants who perform activities and contribute outputs in coordination with the project team.

In the absence of a skilled PFO, the roles and responsibilities of the project team are to perform tasks defined in the project plan developed by external advisors who, in turn, perform key project finance functions. In reality, project team roles and responsibilities are determined by skills and competencies residing in the team, and major duties include:

1. Assigning specific roles and responsibilities to the core project team members
2. Assuming accountability for direction, management, and delivery of the project: scope, budget, schedule, and deliverables
3. Harmonizing participant interests and developing or clarifying project objectives
4. Engaging external advisors and consultants with skills and competencies not residing in the sponsor organization
5. Validating its own and coordinating delivery of timely and quality completed analyses, evaluations, and validations and external advisors and consultants
6. Managing core team, project participant, and customer expectations and relationships
7. Planning and managing project activities, schedules, costs, and quality of deliverables
8. Investigating, analyzing, and evaluating project issues, discovering gaps, and documenting unmet requirements
9. Overseeing and validating internal project analyses, evaluations, and recommendations
10. Ensuring sufficient skills, competencies, and training of project team associates and the project company management team
11. Making participant organizations aware of the need to address the adequacy of human resource contributions, timing issues, and skill deficiencies
12. Facilitating all‐around, unimpeded communication, coordination, cooperation, and collaboration to develop project deliverables efficiently
13. Building, testing, managing, and maintaining and updating the project financial model
14. Handling project change requests and managing and resolving issues and conflicts
15. Managing and coordinating the development of project team documents and artifacts
16. Developing the financing plan and providing support to contract development and negotiations
17. Tracking and reporting project progress and project company performance on an ongoing basis
18. Following internal approval processes for the development of the project business case and the project company's business plan

7.2 ROLES OF THE HOST GOVERNMENT

The roles and responsibilities of the host government authority are determined by the nature of the project bid, type of project, public sector equity position, and government agency skills and competence in project finance. There is a tendency for the public sector to rely on the expertise of sponsors, multilateral institutions, and development agencies for management of the project financing process. Often, the public sector interests and objectives drive the agency's responsibilities to perform the following tasks:

1. Ensure transparent and proper project origination, bid, and procurement management
2. Prepare requests for project proposals and originate growth and social projects such as seaports, airports, railways, hospitals, schools, etc.
3. Ensure all project proposals meet value‐for‐money requirements and maintain political support across agencies involved
4. Meet urgent needs and maximize the economic and social benefits of projects
5. Retain as much control over the project as possible by acquiring project equity preferably through in‐kind contributions instead debt or equity investment
6. Managing project costs and being an active, key party to commercial negotiations
7. Require compliance with local environmental, business, tax, and labor laws and demand safe and efficient project construction and operation
8. Provide input in the development and documentation of project agreements
9. Negotiate project finance documents and sign financing agreements and financial closing
10. Transfer risks to the private sector during project building and operations when feasible
11. Develop programs to attract new capital to increase the country's economic productivity
12. Obtain technological development assistance, transfer of knowledge, and training in new skills
13. Structure projects to help the country's economic growth and increase its competitiveness
14. Provide counter guarantees needed in order to satisfy lenders and multilaterals
15. Provide direct finance from tax revenues, issue bonds and guarantees, credit enhancements, insurance, hedging, and other financial instruments

7.3 ROLES OF PROJECT SPONSORS

The different types of sponsors are project developers making strategic investments, companies looking to increase their international presence and profits, industrial construction contractors, equipment providers, and others. Regardless of type, sponsors assume a good part of risks in infrastructure investments, especially in developing countries. Therefore, they have major responsibilities and play a key role in project structuring and financing. The sponsor tasks, roles, and responsibilities are carried out by the project manager and the project team are itemized below.

1. Decide on the composition of the sponsor group and define the terms of the agreement
2. Determine project company ownership structure, provide equity funding, and demonstrate commitment for future equity infusions to optimize the financing plan
3. Manage host government relations and public‐sector expectations effectively through close relationships
4. Define strategic project objectives, provide policy direction, and assign operations and management responsibilities and personnel to the project company
5. Employ experienced managers for strategic expansion and portfolio diversification in infrastructure projects to satisfy new business development and financial objectives
6. Identify needs, originate projects, and determine project configuration characteristics, requirements, and specifications
7. Coordinate effective project development, obtain efficient financing, and price the project competitively in order to submit a competitive bid
8. Secure internal organizational backing and external political support for the project
9. Ensure proper project governance and make critical decisions
10. Outline project scope, objectives, deliverables, and success criteria and provide direction and coordination of project team processes and activities
11. Maintain oversight of project value integrity and resolve escalated business issues
12. Keep contract management responsibilities and review and approve key work, evaluations, and progress in each project phase
13. Select and approve project advisors, the EPC contractor, and local project partners or facilitators
14. Ensure participation in host government high‐level consultations and decisions for project origination and development in different areas of sponsor expertise
15. Select reliable technology, equipment, and supplier partners to maximize profit and minimize development and production costs and project underperformance
16. Make available qualified people to help the project company start operations successfully and approve needed skills transfers to it
17. Decide the choice of contracts and project finance channels and facilities to be used in the project and lead project negotiations
18. Monitor and evaluate project company performance closely and initiate operational adjustments when necessary

7.4 ROLES OF THE PROJECT COMPANY

The special purpose company, or project company, is a shell entity created by sponsors to own the assets of the project, enter into contractual agreements, and manage the cash flow of the project. It is structured to maximize sponsor tax benefits and it has no obligations beyond the scope of the project. The responsibilities of the project company are concentrated around the following functions:

1. Enter into contractual agreements and ensure that its rights and obligations are clearly defined in commercial and finance documents and contracts
2. Negotiate all contracts in accordance with the project objectives set out by sponsors and the constraints of debt and equity investors
3. Pay close attention to the preparation of the construction contract to build the project facilities according to specifications and monitor construction progress
4. Enter into agreements and manage the offtaker or purchaser, supplier, and O&M contracts
5. Limit the scope of the project to that spelled out in the shareholder agreement
6. Obtain funds from debt and equity investors, collect revenues, royalties, or fees and manage project cash flows and disbursements
7. Comply with project finance covenants and restrictions and provide collateral assignment of project contracts, pledge stock, and grant of security interest
8. Implement the business plan, manage operations, and produce planned project output according to specified performance standards
9. Ensure availability, quantity, and quality supplier inputs and materials at agreed to pricing levels
10. Guarantee availability, quantity, and quality standards at predictable pricing to offtaker or purchaser of the project output
11. Transfer assets to the host government at the end of the concession period if it is part of the negotiated contractual agreements

7.5 ROLES OF THE LENDERS

Project lenders have a central role in project finance and influence the financing structure through loan requirements which are often considered stringent because their investments only have downside potential. Common roles assumed by project lenders are to perform the following functions:

1. Participate in or lead the loan syndication, perform functions of the lenders' trustee, and serve as the project company's account bank if they have a presence in the host country
2. Ensure a sound feasibility study through reasonableness tests of assumptions, rigorous economic evaluation of the project, and realistic, baseline scenario‐revenue forecast
3. Review the project team's market assessment with the project market advisor and validate the cost and revenue projections
4. Facilitate the introduction of project sponsors to other lenders, potential investors, and insurance agents
5. Evaluate engineering, technical, and equipment specifications to ensure consistency with bid requirements and value for the money
6. Assess technical, market, political, construction, and other risks and ensure adequacy of the risk mitigation plan
7. Bring in trusted insurance agents and specialists to negotiate the best possible contract deals for the sponsors with insurance companies
8. Ensure completeness and adequacy of offtake agreements, supply and O&M contracts, and hedging contracts
9. Verify that the sponsor has solid industry experience to implement the project and provide technical and operational support to the project company
10. Make sure the lender's engineer, insurance agent, and other advisors liaison with sponsor and other project stakeholder counterparts
11. Lead the due diligence along with the sponsor's PFO and the legal team and act on the technical, engineering, and insurance recommendations of the due diligence report
12. Review and validate the final market assessment, baseline scenario, and project cost and revenue projections and any management adjustments made
13. Prepare and negotiate financing documents and define collateral and control positions
14. Have separate agreements with the project company to co‐monitor construction progress and operations
15. Require sufficient sponsor equity contribution and ensure ability to provide support if the project has problems in the future

7.6 ROLES OF ADVISORS, CONSULTANTS, AND INSURERS

The roles and responsibilities of project advisors touch all aspects of project development, evaluation, construction, and financing as well as the risk assessment and mitigation and the due diligence parts. The discussion that follows assumes that internal skills and competencies are not available and that advisors are engaged to perform necessary functions. When a skilled PFO is in place, many of the advisors' roles and responsibilities are performed by that organization and the more specialized functions are left to external advisors. Project advisors are engaged either under a retainer fee or a success fee arrangement in the areas shown below and have corresponding responsibilities.

1. Bid and Procurement Advisors

   These are experienced project facilitators who specialize in making contacts and smoothing out the entire project process. They manage customer relationships in the bidding process and their role is to:

   1. Facilitate contacts and meetings with high‐level, host country government decision makers and with local funding sources
   2. Provide advice and guidance to sponsors and developers on bidding in the host country's public procurements
   3. Provide advice and guidance to the host country contracting authority on dealing with private sector, highly skilled managers
   4. Assess project output capability for local use, exporting, and generating income for public sector equity in the project
   5. Ensure adequate project finance education in the sponsor and the host government ceding authority
   6. Contribute inputs to the creation of the project prospectus or information memorandum and support in marketing efforts
2. Engineering and Technology Advisors

   Engineering and technology advisors liaison and work closely with engineering and technology specialists of the sponsor and other project stakeholders. Their roles and responsibilities span across many areas and include the following functions:

   1. Review and evaluate the project's engineering and technology bid specifications and performance requirements
   2. Support the project team to manage the bidding and procurement process effectively
   3. Conduct project site inspections to validate site preparation requirements and identify risks and issues
   4. Provide detailed design specifications and conduct technology and equipment evaluations
   5. Review and assess technology and equipment‐related costs and conduct performance validation checks
   6. Play a role in the project definition and development, cost estimates, feasibility study, due diligence, and the project post mortem analysis
   7. Engage additional engineering, technology, and specialized advisors when needed and select the operations and management company
   8. Monitor project engineering and construction progress to ensure contractor compliance with terms of the contract
   9. Address engineering and technology issues around construction, project acceptance, and operations management
   10. Identify and evaluate the impact of engineering and technology project risks and help in their allocation and mitigation
   11. Help guide the engineering and technology segment of the due diligence and review and validate the findings of the due diligence report
   12. Assist in drafting, reviewing, and evaluating the engineering and technical aspects of project contracts
   13. Create the project company's operations plan and, if needed, supervise the O&M company's initial running of operations
   14. Evaluate the production input needs and material supplies to ensure availability in order for the project company to achieve production requirements
   15. Oversee and facilitate the project acceptance process and ensure that performance criteria are fully met
   16. Contribute inputs to the creation of the project prospectus or information memorandum and support in marketing efforts
3. Financial Advisors

   The main function of financing advisors is to liaison with the project team, funding sources, and counterparts in other project‐stakeholder organizations. The sponsor company's financial advisors' roles and responsibilities overlap with those of the debt and equity advisors and each side's advisors are aiming to protect respective interests. The sponsor's financial advisor roles include:

   1. Evaluate the host country's economic and investment environment and review business and tax laws affecting the project
   2. Assess project definition; screen for strategic, portfolio, and operational fit; and identify possible alternatives to the proposed project
   3. Evaluate the financial implications of the project concession, licensing, and permitting terms and conditions
   4. Provide guidance on project company and financing structures and assist in maximizing project tax benefits
   5. Estimate cost elements in each project stage and validate total project costs and produce or validate revenue projections
   6. Play a major role in the feasibility study and lead the economic evaluation of the project
   7. Review contracts and agreements and assess their financial implications
   8. Assess and validate project‐participants' ability to deliver on current and future obligations
   9. Determine the project economic viability and the project's bankability early on and the potential to raise funding
   10. Manage funding networks and alliances and facilitate development of personal relationships around the world for the sponsor's benefit
   11. Introduce sponsors to potential funding sources, insurers, and to unilateral, bilateral, and multilateral institutions and educate them on their processes requirements
   12. Identify potential sources of debt and equity financing, investigate terms and conditions, obtain and evaluate proposals, and negotiate final financing documents
   13. Build a detailed project financial model, validate its inputs and assumptions, manage updates and reports, and assess model outputs
   14. Identify alternative project finance structures and select the optimal debt‐equity configuration
   15. Educate the host government's agency personnel on project finance processes and requirements and their obligations to ensure successful financing
   16. Participate in the project risk identification, analysis, and allocation and evaluate the adequacy requirement of the lender security package
   17. Provide sponsor inputs to the due diligence and review and validate the findings of the due diligence report
   18. Evaluate the loan, credit enhancement, insurance and potential for additional equity contributions
   19. Manage debt finance disbursements in the construction period, monitor construction stage expenses, and evaluate construction progress and adherence to schedule and budget
   20. Evaluate the project company's supply and offtake contracts to ensure the enforceability and availability of production inputs and demand for its production output according to set terms
   21. Assist in the development of project financing documentation, negotiations, and evaluation of proposals and counterproposals
   22. Help the project team develop the project company's business plan and validate the financial projections of the operations stage
   23. Help develop project‐company financial statements linked with the financial model and satisfy reporting requirements to project stakeholders and host government agencies
   24. Provide analysis and input in the preparation and presentation of the project information memorandum
   25. Provide objective assessments in the project post‐mortem analysis, review findings, and help the sponsor company adopt recommendations for improving project team performance and increasing chances of future project success
4. Insurance Advisors

   Insurance advisors play a major role in project risk management and their roles overlap those of advisors in other project areas, but they usually concentrate in the following:

   1. Analyze the project definition and requirements in order to isolate insurable aspects of the project from those that cannot be insured
   2. Help to identify, evaluate, assess, manage, mitigate, and insure the project risks that the project team deems necessary
   3. Research various project risk types and help subdivide or allocate them among stakeholders who are best able to handle them
   4. Work with sponsors and lenders to analyze insurance coverage issues to satisfy all project stakeholders affected by risks
   5. Advise on project insurance that would be required to make the project financeable and help to arrange it
   6. Obtain best insurance quotes from reputable global insurance companies for required coverages
   7. Help the sponsor's legal experts to structure and negotiate appropriately priced, balanced, and enforceable and sustainable insurance contracts
5. Legal advisors

   The roles and responsibilities of legal advisors vary by project stakeholders, are designed to protect respective stakeholder interests throughout the project, and include:

   1. Liaison with legal teams of other stakeholders to draft, review, evaluate, and negotiate project agreements and contracts:
      1. Sponsor group and interproject participant agreements
      2. Shareholder agreement of sponsors with the project company
      3. Implementation or concession agreement between the ceding authority and the sponsor
      4. Inter‐creditor agreement among lenders
   2. Review host country procurement, environmental, construction, safety, labor, currency convertibility and repatriation of dividends laws, and tax laws and regulations
   3. Assess bid requirements and stakeholder contribution commitment and ensure they are reflected in negotiated contracts
   4. Review funding source, ECA, and multilateral and unilateral agency processes and requirements
   5. Evaluate the host country's laws, rules, and regulations of the project industry structure and investment environment
   6. Conduct thorough political and legal risk analysis and business law enforceability
   7. Coordinate contacts with other stakeholder legal teams and counterparts in the host government agency
   8. Validate the transparency and fairness of the host government's procurement process and requirements
   9. Follow up, negotiate, and manage the project licensing and permitting process to completion
   10. Represent the interests of the sponsor in the due diligence and review and validate the report prepared by the lenders' legal team
   11. Interpret the implications of the due diligence findings and make recommendations to the project team on changes needed
   12. Draft, review, evaluate, negotiate, approve, and manage the documentation of project agreements
   13. Work with insurance agents to identify, evaluate, and recommend approaches to mitigate, manage, and allocate project risks
   14. Provide advice and guidance to the project team on all legal issues and provide answers to questions as they come up
   15. Review the project feasibility study report and provide feedback on additional support that may be needed
   16. Communicate findings of the feasibility study to project participants, outline the project structure, and create the legal strategy to move forward
   17. Review, prepare, negotiate, approve loan, credit agreements, security documents, contracts, and hedging agreements' terms and conditions to cover project risks
   18. Monitor project finance activities and progress in the construction stage and resolve EPC contract compliance issues
   19. Assist in the development of the financing plan, prepare and negotiate debt and equity finance agreements, and negotiate closing of permanent financing
   20. Assess the adequacy of financial reports from the project company to appropriate project participants
   21. Help in the preparation of the project information memorandum and its presentation to potential investors
6. Market Assessment and Project Evaluation Consultants

   The roles and responsibilities of the market assessment and project evaluation consultants cover areas of project evaluation related to the host country's environment, megatrends, and subtrends, as well as the project's industry, market size, and growth potential. These roles include delivering on the following responsibilities:

   1. Liaison with project team members and counterparts in other participant organizations to obtain and share information
   2. Validate the project strategic, portfolio, and operational fit and the opportunity costs of doing and not doing the project
   3. Assess the customer or user needs in the host country and how they are currently being satisfied and at what pricing and marketing levels
   4. Perform a sponsor situational analysis followed by an internal strengths, weakness, opportunities, threats (SWOT) analysis to identify corporate risk tolerance and gaps in skills and competencies to execute the project
   5. Perform industry analysis to determine current capacity, needs for structural changes, historical regulatory intervention and effects, and introduction of competition
   6. Assess host country political, economic, social, technological, legal, educational, and demographic (PESTLED) trends
   7. Develop data and information to quantify the project company's market opportunities in the feasibility study and project development phases
   8. Perform market research and help estimate project development costs in cooperation with project team members
   9. Identify what is needed to assess project economics, what is knowable, what is controllable, and key factors driving project value
   10. Develop appropriate methods and techniques to conduct the project company's demand analysis
   11. Create a baseline scenario, develop assumptions for the driving factors' future behavior, and produce a baseline set of cost and revenue forecasts
   12. Establish project company demand and output requirements to determine project economic viability in the feasibility study
   13. Validate demand related data and assumptions and provide input and information to the due diligence effort
   14. Develop plausible alternative scenarios and perform sensitivity analysis and simulations
   15. Assist in the development of the project company's business plan and develop its marketing and sales plans
   16. Recommend a range of simulated project values for management to select for final decisions
   17. Contribute inputs to the creation of the project prospectus or information memorandum and in support of marketing efforts

7.7 ROLES OF MULTILATERAL AND UNILATERAL INSTITUTIONS

There are several unilateral, bilateral, and multilateral financial institutions created to support different types of investments, programs, and countries around the world, and meet different project needs. Their roles vary by project and the scope of their activities is determined by their organizational charters which are discussed in more detail in Chapter12. Their responsibilities evolve around a variety of programs and support they provide.

1. Multilateral Institutions

   They participate in projects globally and provide the majority of support to developing countries with a variety of instruments they offer and the functions they perform. In addition to economic growth and development initiatives, following are some functions these institutions perform:

   1. Ensure projects contribute to economic growth or improve social infrastructure in the host country
   2. Coordinate with sponsors and developers to deliver projects in countries the sponsors have no presence in or when bilateral aid is not available
   3. Asses all project environmental issues and social considerations and ensure its sustainability
   4. Help the host country through the process to manage project complexity and deliver timely approvals
   5. Address voting rights and other intercreditor matters and provide lending when necessary
   6. Provide quality partnership alternatives to sponsors and the host country's public sector
   7. Use their influence with the host country's government to bring parties together, close gaps, and resolve issues
   8. Educate public sector personnel involved on project approval processes and requirements
   9. Provide options to balance different interests and add legitimacy and weight when challenging project development issues arise and need to be addressed
   10. Bring unique expertise in project assessment, structuring, and financing and mobilize needed experience from around the world
   11. Leverage their host government and global financial relationships to coordinate multicountry, multifinancial institution funding
2. Unilateral Institutions

   The key players in this category are ECAs whose mandates and programs vary widely across countries. In general, their charter is to provide credit support in the form of equipment buyer credit or equipment supplier credit. Their programs include loans at subsidized interest rates, political and business risk coverage, and direct loans to exporters of goods and services produced in the ECA country. These government‐sponsored agencies provide equivalent services to projects they participate in as multilaterals institutions do and coordinate programs and support to projects they participate jointly.

   Other US federal or state agencies, such as Overseas Private Investment Corporation (OPIC), Marine Administration (MARAD) and Energy Research and Development Administration (ERDA) make programs available to projects and support that fit specific investor and project needs. State Infrastructure Banks (SIBs), and Transportation Infrastructure Finance and Innovation Act (TIFIA) programs support only domestic US infrastructure projects. All advanced countries also have unilateral agencies that serve their country's economic interests and advancement of their foreign policies and image abroad. The programs provided by unilateral agencies include direct loans, loan guarantees, and insurance against risks. Additionally they provide guidance regarding economic, political, and business conditions; local partner selection, and other services that help assess the feasibility of projects.

3. Bilateral Institutions

   These are regional banks and other financial institutions that provide programs and services for project development and financing, primarily in their region though, in some instances, in underdeveloped counties rich in natural resources too. In many respects, the programs and services offered by bilateral institutions mirror those of unilateral and multilateral institutions. Bilateral institutions are highly specialized in project evaluations, local and regional financial markets, and coordinating private investor and government activities in their regions.

7.8 ROLES OF THE EPC CONTRACTOR

The cost plus, fixed price, turnkey, and unit price are types of contracts used in international project finance, but the most commonly used ones are engineering, procurement, and construction (EPC) contracts. The usual roles of the EPC contractor include:

1. Liaison with the sponsor's engineering associates, host government engineers, and external advisors to clarify project specifications and requirements
2. Perform physical site inspections and environmental assessment to ensure access to and suitability of the project site
3. Obtain all required licenses and permits from the host government and technology providers
4. Conduct survey and report on physical and cybersecurity requirements of the planned project facilities
5. Oversee equipment and technology performance tests to ensure project requirements are fully met
6. Ensure availability and quality of materials and timely delivery access of utilities to the project site
7. Obtain attractive pricing and terms and conditions from subcontractors for turnkey projects
8. Be the single point of responsibility and satisfy all performance guarantees: provide performance and schedule guarantees, liquidated damages, and manage sub‐contractor retainage
9. Ensure availability of acceptable housing and other amenities in the host country for its own and subcontractor employees
10. Coordinate all technical, equipment, and subcontractor activities and manage the risks of project cost changes
11. Design and build the project on a turnkey, fixed price contract on time and on budget, and assume liability for delay damages and for project performance that does not pass tests
12. Validate and support claims made in the information memorandum to increase customer and investor project confidence

7.9 ROLES OF TECHNOLOGY AND EQUIPMENT PROVIDERS

The technology and equipment providers are usually subcontractors to the EPC contractor and their roles and responsibilities are closely linked with those of the EPC contractor. Their roles are of particular importance in cases of new technology introductions to ensure that it works as designed. Their responsibilities of technology and equipment providers overlap and commonly include:

1. Procure suitable technology and equipment to meet project specifications at best pricing and terms and conditions
2. Ensure technology availability to the project and subsequent updates and upgrades
3. Obtain documentation of equipment and parts and service support agreements for the EPC contractor
4. Assess and address technical and equipment issues and provide technology and equipment reliability and performance guarantees
5. Oversee the quality inspection of equipment, proper installation, and technology delivery on time and budget
6. Resolve technical and equipment issues to the project company's and other project stakeholders' satisfaction
7. Provide ongoing assessment of equipment used and performance to ensure adherence to technology standards, processes, and schedules
8. Coordinate with EPC contractor and sponsor technical team activities and facilitate ECA documentation requirements and support for the project
9. Assume responsibility for technical tests and validation of performance to ensure project acceptance

7.10 ROLES OF PROJECT OFFTAKERS AND SUPPLIERS

Offtake and supply contracts are the glue that holds together infrastructure project financing. They are revenue and production guarantees provided by the customer and major supplier or the host government when appropriate; hence, the crucial role of these contracts.

1. Purchaser or Offtaker

   The project company requires predictability and stability from the cash flow of its output revenue. Offtakers, on the other hand, insist on a balance of their obligations with requirements of the project company. The offtake or purchase agreement is a crucial part of project finance because it ensures predictability of the revenue stream on an ongoing basis for the duration of the project life cycle or concession. The offtaker's usual responsibilities include:

   1. Provide unimpeded access of the project company's production delivery to the user or purchaser facilities
   2. Negotiate and sign a sensible offtake agreement with the project company that makes the project financeable
   3. Require limited variability in the project company's output, prices, and agreed to output quality levels
   4. Make payment regardless of whether the project company production is generated on a take‐or‐pay or a take‐and‐pay contract
   5. Provide assistance and support in resolving regulatory and unwarranted government intervention issues
2. Project Suppliers

   The project company insists on adequate quantity, quality, and timely delivery of supplies and production inputs at stable and predictable prices. On the other hand, suppliers of production inputs to the project company want terms of the supply contract to be met with current market prices and timely payments. Supplier responsibilities evolve around meeting the following requirements of the project company:

   1. Guarantee availability of adequate production inputs and supplies at predictable and stable prices
   2. Treat the project company equitably and deliver raw materials and other production inputs to the project company at market prices
   3. Honor delivery commitments in the provision of production inputs according to contract clauses
   4. Ensure the quality of materials and other production input‐specification requirements

7.11 ROLES OF THE O&M COMPANY

Last but not least are the roles and responsibilities of the O&M company that executes the project company business plan and ensures its long‐term viability. The O&M company's primary responsibilities include:

1. Hire engineering, technical, and other specialized capabilities for operational management of the project company
2. Outsource functions not readily available in the project company or another O&M company
3. Provide strong operating guarantees and commitments to meet contractual obligations
4. Manage project company operations and provide management support and training
5. Monitor operating performance, conduct variance analysis, and provide regular reports to sponsors and other rightful parties
6. Generate and provide financial statements and manage the project company cash flow per agreed to covenants and restrictions
7. Make appropriate operational and business plan adjustments to offset the impacts of materializing commercial risks and ensure continued financial viability
8. Contribute inputs to the creation of the project prospectus or information memorandum and support marketing efforts