25 Nov 2019
Lenders Insurance Clauses in Power projects - November 2019
The lead up to the financial close of a project, either at the start of the construction phase, or the purchase of an operational asset, is a complex process with many factors that can cause delays. However, with the right level of organisation and good communication with lenders, insurance does not need to be one of them. Typically, project financiers will look to include certain policy enhancements, known as ‘Lenders Clauses’ to ensure that the insurances surrounding the project comply with their loan agreements.
Lenders clauses can be, if not handled correctly, a roadblock to the finalisation of an insurance placement. However, a clear understanding of what these clauses are designed to do, and how they apply to the project, will mean a faster, more straightforward process when seeking lender sign-off
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