Key Considerations In Energy Take-Or-Pay Contracts
April 12, 2013, 2:58 PM EDT
Law360, New York (April 12, 2013, 2:58 PM EDT) -- Perhaps the most common type of off-take contract in a large-scale energy project is the take-or-pay contract. A properly constructed take-or-pay contract provides the seller with an assured revenue stream that ensures an adequate return on the significant project capital investment and risks to which it is exposed.
Additionally, it is a form of contract that is generally understood by lenders, and it is often the most important means for a seller to secure the substantial external debt financing on limited recourse terms that energy projects...