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A concession agreement is an agreement recording the details of a partnership between a private entity and a public entity, usually a corporation and a government.

Concession agreements usually involve three parties: (1) a government; (2) a private individual or corporation; and (3) a bank or other institution that is financing the private entity’s work. The private individual or corporation is often referred to as the “contractor” or “concessionaire.” The concessionaire is often a consortium of private companies that all have expertise in the area of development needed by the host country.

Concession agreements differ from a private contracts because a government is involved as a party. It differs from a treaty because a private individual or corporation is involved. In the typical concession agreement, the concessionaire agrees to provide capital, skilled labor, and knowledge in order to develop a foreign country’s natural resources or a specific industry. In addition to the development of the country’s resources, another goal is mutual profit.

We have specialist associated lawyers that have experience on all types of concession agreements and can provide support and expertise to governments, contractors and the financing banks.

In collaboration with ADCS CONSULTING LIMITED, we mobilise resources for private enterprises for project financing. The degree of sophistication involved in the funding of a project is usually driven by the project’s size and complexity. In large projects, the debt financing is often provided by a syndicate of banks, which may be made up of both local and international institutions.  There may be several classes of lending banks – international banks lending foreign credit, local banks lending domestic currency and international agencies. Different tiers of lending may also be involved such as secured and unsecured, short term and long term and subordinated. The challenge of structuring the project finance is to establish a mix of debt, equity and mezzanine financing that optimises the use of financial sources.

Equity capital is provided by the sponsors, but also by institutional investors, local or international capital markets and specialised funds.

Equity capital is provided by the sponsors, but also by institutional investors, local or international capital markets and specialised funds.

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