One of Project Co's principal obligations under the PV Standard Project Deeds is to finance (in total or in part) the delivery of the Project. It will do this through a combination of debt funding and Equity Funding.
The definition of Equity Funding is intended to capture all sources of Project funding which are contributed, directly or indirectly, by the Equity Investors to any Group Member. Depending on a Respondent's equity capital structure, this may include subscriptions for shares, units in a unit trust or shareholder loans or a combination of these.
The State permits Respondents to freely determine their equity capital structure on the basis that Respondents can be expected to maximise the economic efficiency of that structure as a key element of producing a financially competitive Proposal.
The distinction between Equity Funding and debt funding is a critical one for the purposes of calculating the amount of any Termination Payment and compensation for Force Majeure Events under the Project Deed. This is discussed in sections 3.3 and 3.4. In evaluating Proposals, the State will determine whether any proposed components of a debt funding structure, such as mezzanine debt, should in fact be defined as Equity Funding.