This is an agreement between the project company and other suppliers of the project. An existence of a long-term supply contract at a fixed cost from a reliable supplier, for example, the agreement by the government to supply fuel to the project company at a fixed cost, may substantially reduce the risk profile of the project.
In addition, a project may need equipment. For example, construction of power plants require boilers, turbines, generators and other pieces of electrical equipment.30 Where the obligation to construct the projects is transferred to a contractor on a turn-key basis, usually the purchase of the equipment is entered into by the supplier rather than the project company.
__________________________________________________________________________
30 UNIDO, above, 216.