Consistent with the limited recourse nature of the finance provided for the Project, the State does not require shareholder guarantees for Project Co.
While the State does not require Project Co to obtain parent company guarantees from the Key Subcontractors in favour of Project Co, the State will evaluate the financial capacity of the Consortium to deliver the Project. That evaluation will include an assessment of the credit worthiness of any proposed parent company guarantors. If the proposed parent guarantor is not the ultimate holding company, the State will need to be satisfied that there are sufficient controls in place to ensure that the assets of that parent guarantor are retained for the duration of the parent company guarantee. This will be a matter of evaluation.
Where parent company guarantees for Key Subcontractors are provided as part of a Proposal, these should be captured as Project Documents in the Project Deed. Provisions are included in the PV Standard Project Deeds to control changes in ownership of these parent companies to ensure the level of financial capacity of the Key Subcontractor and the parent guarantor as evaluated by the State is retained for the period of involvement of the relevant Key Subcontractor and parent guarantor in the Project.
If a parent company guarantee is provided, the parent of a Key Subcontractor should be a party to the relevant Key Subcontractor Direct Deed for the purposes of acknowledging the State's security rights in respect of the Project and the Parent Company Guarantee.