FairFund Federation will accept Concession Funding Applications from Members who wish to be Sponsors for project development. The Concession is subject to availability of free, clear and unencumbered cash / assets in the RMRT. A successful applicant will receive a Conditional Offer of a Concession Licence issued by the Federation granting permission to FairFund Global Settlements Ltd (‘FGS’) (under registration) to establish a Special Purpose Vehicle (‘SPV’) for the delivery of a turnkey project. This concession will permit FGS to act as the settlement agent for the procurement of all goods and services acquired by the SPV set up for an approved project holding a Concession Licence. A precondition for the granting of such a licence is that the Sponsor of the project agrees to enter a turnkey contract to deliver, build and commission the project within a five year period to the approved specification. Furthermore the Sponsor must establish (with the assistance of the RMRT) that the project will be transferred into private or public ownership by the fifth anniversary. The terms and conditions to fulfil the commitment to take over the assets of the SPV are the subject of a Forward Purchase Agreement between the Sponsor and FGS.
All applications for Concession Funding will be supported by a verifiable project summary including an anticipated budget of all project funding required to design, build and deliver the project. The risk analysis will concentrate on the ability of the developer to complete the contract on a professional basis and on its capacity to arrange the buyout of the assets of the SPV by the fifth anniversary or re-finance the project through bank medium to long term funding.
The project is the property of the SPV being a fully funded subsidiary of FGS. The Sponsor of the project who has entered a Forward Purchase Agreement of the SPV assets has full use of those assets in line with the business and purpose of the project for the full duration of the five year term. All capital allocated to each SPV is the capital of the RMRT which is free clear and unencumbered. Since there are no loans related to the funding of each SPV, therefore there are no interest charges payable. Ten percent of the project budget will be for administrative costs and charges to run the SPV.