Examples of Direct agreements that could be established by the Entity (and other governmental entities) for and/or relate to:
a) The Financing Contract where a direct agreement is made between the Entity and the financiers (e.g., banks) and gives the financiers the right to step in and take over the execution of the Privatization Contract in the event that the Private sector party does not meet its obligations to the funders as part of their financing arrangements. This could also include any guarantees provided by the government on behalf of the Entity, to the financiers.
b) The lease or sub-lease of the land which forms part of the package of agreements to enable the execution of the Privatization Contract - in this instance, a direct agreement is made between the lessor and the funders and gives the funders the rights to continue to use the land in the event that the Private sector party defaults and that the funders have to take over the running of the Privatization Contract.
c) Long term supply or sale contracts - for example, in the case of the energy sector, there may be a long term fuel supply agreement between the Private sector party, the Entity and a government owned or linked entity to supply the Project with fuel to be able to generate electricity or for the supply of teachers in the case of the education sector; depending on how these have agreements have been structured, there may be a need to establish a direct agreement between the funders and the suppliers to ensure continued supply in the event that the funders have to step into the Privatization Contract.