The services of this sector are specified only for public sector or legal authorized entities of public sectors. The purpose of this section is to provide a summary of Project Finance against oil. This is a very good risk free method the borrower can obtain the target cost for its project against oil back contract.
The borrower can obtain minimum one (1) billion Euro investment and maximum ten (10) billion Euro for their social and commercial origin projects at zero percent (0%) interest. The borrower will only responsible to supply the petroleum products to international safe ports nominated by the investor or its supporter bank.
The products prices will be only 2% minus than international plats prices which are announcing daily, the borrower will be responsible to start the supplying of product once the project is 25% developed and the whole supply must complete within 6 to eight 8 calendar years CIF to nominated safe ports.
This is the first unique, risk free and modern model of project financing against oil back contract whether the borrower will supply only the product(s), no need to pay any interest, charges , lawyer fee or any type upfront fee.
Here is available the format of application and procedures and the draft OIL BACKED CONTRACT AGREEMENT.
NOTE FOR PRIVATE SECTORS
Some private well reported companies who have the oil guarantee and back up support of ministry their applications are acceptable.
PROCEDURES FOR OIL BACKED CONTRACT
- Step 1: Client submits its Client Information Sheet (CIS/KYC) + Brief Proposal of its civil and social project(s). Client also provides Letter of Intent (LOI) along authorization original hard copies from concern Ministry. ( Non-Sanctioned Country and must having oil)
- Step 2: ADP carries Due Diligence (DD) of above full package of step 1 documents of the client within 5 to 7 working days.
- Step 3: If the client successfully advances through the above two initial steps and work in accordance with the below Ten basic rules (Project Limits), ADP Issues Letter of Acceptance (LOA) and Draft Contract in 3-5 working days along Letter of Intake of funds availability and confirmation of investment against oil back contract. The Draft contract shall be open for logical opinions and amendments. The Investment Letter of Intake shall be addressed to Ministry from ADP selected top trusted bank. The ministry can confirm the Letter of Intake form issuance bank.
- Step 4: Upon step 3: the contract will be signed direct with concern Ministry.
- Step 5: Upon signing of the contract the first payment of the project will be credit in special project account of the client within forty 40 banking days. The first payment of the project will be minimum 10% and maximum 15% of full face value of the project cost, all remaining payments will be credit to project account according to work plan measurement report of the project.
- Step 6: After completion of the 20% of the project the client will be responsible to accept oil products supply order from ADP, the order will not up to 7% amount.
- Step 7: The construction work of the project shall be awarded to a top qualified international company according to ICB rules, the contractor will be selected by ADP. The profit of Construction Company will be according to the norms and Law of the Project host country.
- Step 8: The Project management and Monitoring contract will be awarded to a good trusted and qualified company selected by client/ Ministry. In case the Ministry /Project owner selected the construction company then the Project Monitoring and management contract must award to ADP selected company. The monitoring fee will 2% of the project cost.
A- IMPORTANT NOTE’S
- The Oil backed contract cannot be signed with any 3rd Party ( Must be Ministry of Governmental company and supported and confirmed by concern Ministry)
- The concern Ministry must authorize ADP as the Fund rising manager for oil backed lending program.
- The Ministry must able to start the product supply to international safe ports nominated by ADP or its final supporting bank at the 2% discount of international Plat prices.
- The supply must start once the 25% of project cost is paid by ADP to the project account of the client, total supply time will be five 6 to Eight 8 calendar years.
- The oil products (Petroleum products) selection will be optional by the ADP.