Q:Who are the parties to a project finance transaction? (Part 2)

A: The Facility Agent:One of the Lenders will be appointed as the Facility Agent and will act on behalf of the other lenders to administer the loan. This party is responsible for the mechanistic aspects of the loan and its role includes; coordinating drawdown, repayments and communication, relating to serving notices and disseminating information between the parties to the loan documentation. The Facility Agent also monitors compliance with the covenants in the loan documents/agreements.

Q:Who are the parties to a typical project finance transaction (part 1)?

A: Project finance is a long-term method of financing large infrastructure and industrial projects based on the projected cash flow of the finished project rather than the investors’ own finances. Project finance is usually structured through the creation of a legally independent project company, financed with non or limited recourse debt, equity provided by one or more equity investors/sponsors as well as a syndicate of banks who will provide loans for the project. 

Q: What is the significance of Investors Protection Fund?

A: Section 197 of the Investments and Securities Act 2007 (the “ISA”) empowers the Nigerian Stock Exchange (the “NSE”) to establish and maintain a fund to be known as the Investor Protection Fund (the “Fund”).

Q: As a Pioneer company in Nigeria, what kinds of tax reliefs are available to me, and how do I qualify for these reliefs or grants?

A: By virtue of the Industrial Development (Income Tax Relief) Act CAP 17, LFN 2004 (the “Act”), the Federal Government of Nigeria has made provision for tax relief for certain industries that may be issued with pioneer status certificates by the Minister of Trade and Investment through the Nigerian Investment Promotions Commission (NIPC).  The grant of pioneer status is one of the ways through which the Nigerian government seeks to woo investors in particular sectors of the economy.