Government Loan Guarantee SOP and Due Diligence:

  • What stage is the project at?
  • Is the Private /Public Partnership finalized?
  • What is the % of the Govt Guarantee to the ask?
  • Offtake Agreements (Govt or Private)?
  • Power Purchase Agreements? (Govt or Private
government loan guarantees

Steps:

  1. For banking compliance, RFP to be provided from Operating Company to Phaeron Transformative Ventures with the company profile. Ensure it represents that an agreement with the sovereign entity is in place specifying who has controlling interest i.e. Does the govt have any management control? Financial control?
  2. What government agency is issuing the guarantee? Does it have backing from their Central Bank or Treasury?
  3. Provide officers bios and name of signatories.
  4. Channel of communication is established between the parties with financial institution.
  5. Bank provides proposal with options within 30 days for Sovereign Guarantees. 60-90 for PPAs, SBLC etc.
  6. Due Diligence commences: a full DD package will include details about the project etc. Funding is from a licensed and regulated financial institution and only after we have a full submission can they bring funds specific for the project. The funds may come from pension funds, sovereign funds, family offices, or banks. We can only allocate it when we receive a full business plan for the project, including, but not limited to, feasibility studies, business plans, PPA, financial projections, pro-forma, P&L, COGs, cash flow, balance statement, etc.
  7. To proceed we need the language of the sovereign guarantee, PPA, PPP etc to make sure we can accept the language. What government agency is issuing the guarantee? (Energy Ministry, Housing Authority, Dept. of Agriculture etc.)
  8. Does it have backing from their Central Bank or Treasury?
  9. Full disclosures about the recipient, financial CIS, with passports etc.
  10. Letter of commitment or a MOU from the government to the Operating Company, noting the percentage or total value of guarantee, and give specific details that matches the project package submitted.
  11. Provide the operating agreement between the operating company and the sovereign entity.
  12. A phone call with the end recipient of the sovereign guarantee via video conference.
  13. Everything gets double verified after initial due diligence through government channels
  14. Once cleared, our  banking institution provides an LOI
  15. A call with the bank and the principals.
  16. The institution provides a contract and if they agree, financing is issued against the final Govt. Guarantee