Cross-Border Project Finance / PPP / Concession Notarisation for Foreigners — Sponsors, Lenders, Concessionaires, ECAs and Multilaterals

How does project finance differ from corporate finance — why does it need more notarisation?

Corporate finance gives lenders recourse to the parent's whole balance sheet (cross-default across subsidiaries) — security focuses on negative pledge + guarantee. **Project finance** is limited / non-recourse — lenders rely on project cash flow only; sponsors guarantee only completion / cost overrun during construction → after completion = walk-away. Lenders therefore need a **bankable security package + Direct Agreements + step-in rights** across every counterparty + reserve accounts + an insurance pack + ESG compliance. Hundreds of documents — every one must be notarised + Apostilled → the notary sits on the critical path to financial close. Any document failure = delayed first drawdown = commitment fees of USD 50K–200K per week.

How does PPP Act B.E. 2562 differ from the 2556 Act for foreign investors?

The 2562 Act (in force 11 Mar 2019) changes five key things: (1) threshold — projects above THB 5,000M require PPP Committee approval (was THB 1,000M); (2) faster process — project investment plan → PPP approval → bidding within 9 months (was 18); (3) material modification rules — cost growth > 10% or scope change = fresh approval; (4) direct negotiation allowed for unique technology / national security; (5) state step-in clarified — must compensate the concessionaire at fair market value. Foreign lenders want a Direct Agreement that (i) notifies them before any state step-in; (ii) compensates senior debt + mezz + equity in full; (iii) gives the lender substitution rights before state termination. We notarise + Apostille — usable with ADB / IFC / JBIC immediately.

What are CTA, ICA and SSA — how do they differ?

**Common Terms Agreement (CTA)** sets the common definitions + CP + drawdown + reps & warranties + covenants + events of default shared across every tranche (multilateral + ECA + commercial + mezz) — to avoid conflicts between loan agreements. **Intercreditor Agreement (ICA)** governs the lender group itself — ranking (senior > hedging > mezz > sub), voting (simple / super-majority / unanimous), standstill (mezz / sub cannot start enforcement), waterfall, sharing of recoveries, hedging counterparty treatment. **Security Sharing Agreement (SSA)** specifies that the security trustee / agent holds the security for which lenders and how proceeds are divided. All three notarised + Apostilled by the facility agent (HSBC / BNY / Citi / DBS Trustee) before first drawdown.

Why does the Direct Agreement matter — what's the risk without one?

The Direct Agreement is the **bankability test** — no Direct Agreement = the deal is not bankable = the lender will not advance funds. Without one: (a) concession termination risk — the state terminates immediately without notifying the lender → lender security = zero (the concessionaire holds no assets); (b) EPC default — the EPC contractor abandons works → no step-in = project never completes = zero cash flow; (c) offtaker walk-away — the PPA counterparty finds excuses to terminate → revenue = zero; (d) insurance cancellation — the insurer cancels the policy → the lender loses loss-payee status. The Direct Agreement must cover: state (concession grantor), EPC, O&M, offtaker (PPA / GSA), fuel supplier, land lessor, insurer, account bank. All notarised + Apostilled — lender's counsel reviews before financial close.

What size project triggers Equator Principles 4 + OECD Common Approaches?

**EP4 (March 2020)** binds the 137 Equator Principles Financial Institutions (covering every major Thai bank — KBank / SCB / Krungsri / TTB) financing project finance above **USD 10M** in any country, requiring: (1) A/B/C categorisation; (2) Category A/B in non-designated countries (including Thailand) must apply IFC Performance Standards 1–8 + EHS Guidelines; (3) stakeholder engagement (Cat A); (4) independent review (Cat A); (5) action plan + annual monitoring. **OECD Common Approaches 2024** binds ECAs (JBIC / KfW / EXIM / Sinosure etc.) for export credits above USD 10M + repayment over 2 years: climate + human rights + anti-bribery + Paris alignment. Non-compliance = the lender withdraws the tranche → deal collapse. We notarise the EP4 / OECD compliance statement + Apostille — a CP.

Why do lenders require DSRA + MRA + the cash waterfall?

Because project finance is cash-flow dependent → lenders need a **liquidity buffer** against volatility: (1) **DSRA** = six months of senior debt service — funds set aside to pay interest + principal if revenue dips (PPA counterparty delay, plant shutdown, force majeure); (2) **MRA** = 5–10% of capex — built up 3–5 years ahead of major overhauls (power plants every 6 years, gas turbines every 50K hr); (3) **O&M reserve** = 2–3 months of O&M; (4) **restoration reserve** for end-of-concession site reinstatement. **Cash waterfall**: operating costs → senior debt → DSRA top-up → MRA → mezz → sub → sponsor distribution (only if DSCR ≥ 1.20× + no default). Tri-party account agreements notarised + Apostilled — required by the account bank (HSBC / Citi / SCB / KBank).

Do ECA tranches (JBIC / Sinosure / K-sure etc.) need different notarisation than commercial?

Yes — ECA tranches follow distinct documentation standards: (1) **local content** — JBIC requires Japanese equipment > 30%; K-sure requires Korean content; Sinosure requires a Chinese EPC; EXIM-US requires US content + Maritime Cargo Preference. We notarise the sponsor's content certification + Apostille. (2) **OECD Common Approaches** — climate + human rights + anti-bribery. (3) **ECA cover documents** vary in format (JBIC untied loan agreement vs K-sure comprehensive cover policy). (4) **Apostille route** — JBIC via Tokyo MOFA; K-sure via Seoul MOFA; Sinosure via Beijing (China joined HCCH in November 2023); KfW via Frankfurt Bundesverwaltungsamt. We notarise to each ECA's standard + dispatch the Apostille via the correct route — reducing re-submission risk.

How does Thai security perfection work — is it hard for foreign lenders?

There are four perfection points in Thailand: (1) **Land Office** — mortgage on land + building + plant fixed to land; 1% fee (capped at THB 200K); must be done in person → foreign lenders use **notarised + Apostilled POAs**. (2) **DBD** — Business Collateral Act 2558; registers movables + IP + receivables + accounts + going concern; THB 1,000–10,000. (3) **SPV share register** — share pledge; notice + endorsement. (4) **Tri-party account agreement** with the account bank — notice + acknowledgement. No public notice is required, but every document must be notarised + Apostilled for the foreign lender's benefit. Land Office perfection 3–7 days; DBD 1–3 days; full security package closing 5–10 days. We coordinate with the lender's counsel + local counsel at every step.

What do Sponsor Support Agreements (ECA + completion + cost overrun) cover?

Sponsor support partially backstops the deal to keep it bankable: (1) **Equity Contribution Agreement (ECA)** — the sponsor injects equity per schedule (typically 25–35% of total project cost); an LC / SBLC backs late injections; (2) **completion guarantee** — sponsor guarantees the project completes by the sunset date (risk transfers from lender → sponsor during construction; post-completion = walk-away); (3) **cost overrun undertaking** — sponsor funds budget overruns (typically capped at 10–20%); (4) **DSCR make-up** — sponsor injects equity if DSCR < 1.15× (first 5 years); (5) **cash deficiency support** — covers O&M cost overruns; (6) **debt service undertaking (DSU)** — covers debt service if construction is delayed > 6 months. All notarised + Apostilled — foreign lenders (especially ADB / IFC) mandate ECA + completion guarantee.

Can the 10% WHT on interest be reduced — how do DTAs help?

**Default WHT** on interest paid to a foreign lender = **15%** (RC § 70) → reduced to **10%** if the lender is a bank / FI / insurance company (RC + Royal Decree 18). DTAs reduce further: Singapore 10% (15% non-bank), Japan 0% (government / multilateral) / 10% (bank) / 15% (other), Netherlands 0–10%, Germany 0–10%, Hong Kong 10–15%, USA 0% (government / multilateral) / 15% (other). **ADB / IFC / AIIB / JBIC** generally get 0% under DTA government / multilateral exceptions. Steps: (1) lender obtains a Tax Residence Certificate (TRC) from its home MoF; (2) notarised + Apostilled; (3) submitted to RD for DTA application approval (3–6 months); (4) reduced rate applies from the approval date. Wrong procedure = WHT 15% for the whole tenor + no refund. We notarise the TRC + DTA application + Apostille — saving USD 1–5M per year on a USD 200M deal.

Where does the PPA / GSA / offtake agreement need notarisation?

The PPA / GSA / offtake is the project's principal revenue source → lenders demand a **Direct Agreement with the offtaker** + **assignment of PPA receivables**. We notarise: (1) the PPA original (wet signatures of concessionaire + offtaker); (2) the Direct Agreement between lender + concessionaire + offtaker — step-in + notice of default + cure period; (3) the assignment agreement + notice to offtaker + acknowledgement (offtaker confirms it will pay the lender on step-in); (4) tariff adjustment mechanism — index (CPI / PPI / USD / fuel) + currency; (5) termination compensation — net book value + future cash flow compensation on state termination. All notarised + Apostilled + translated TH/EN. EGAT / PTT / PEA / MEA are the major Thai offtakers — we have notarised 30+ deals.

What does Political Risk Insurance (MIGA / Sinosure / NEXI etc.) cover — and what does the notary do?

PRI covers four risks: (1) **currency inconvertibility and transfer restriction** — when BoT restricts FX transfers; (2) **expropriation** — direct / indirect (including creeping); (3) **war and civil disturbance** — coup / civil war / terrorism; (4) **breach of contract** — state default on the PPP / concession. Providers: MIGA (World Bank), Sinosure (China), NEXI (Japan), K-sure (Korea), EXIM-US, DFC, Coface / SACE / Euler Hermes (Europe). We notarise: (1) the insurance policy + endorsement; (2) the loss payable clause (lender = first loss payee); (3) the subrogation agreement — once the insurer pays, recovery rights transfer to it; (4) claim documentation — notarial affidavit + statement of loss + Apostille. PRI premium 0.5–1.5% of insured amount per year — but lowers deal WACC by ~50bps → positive ROI.

How do sponsor distributions (equity repatriation) clear BoT?

Sponsor distribution = dividend / capital reduction / loan repayment to the foreign sponsor — requires: (1) **distribution lock-up test (CTA)** — DSCR ≥ 1.20× + no default + reserves topped up; (2) **audited financial statements** — by a Big 4 firm (PwC / EY / Deloitte / KPMG); (3) **WHT 10%** on dividends (RC § 70 + DTA — Singapore 10%, Japan 0–10%, Netherlands 0–10%); (4) **Form ThorTor.4** — BoT filing before remittance; (5) **underlying documents** — P&L + dividend resolution + tax receipt; (6) FBL compliance (if foreign shareholding > 49%). We notarise the dividend resolution + DSCR certificate + audited P&L + WHT filing — a CP at the account bank before wire-out. Procedural breach = BoT blocks the transfer + fine up to 2× the amount. We notarise every distribution cycle.

What does a PPP deal register at the Land Office — can a foreign investor do it?

The Land Office handles: (1) **lease registration** — leases on state / treasury land > 3 years must be registered (CCC § 538); max 30 + 30 (Land Code § 540) = 60 years; (2) **surface right** — concessionaire builds on state land and owns the structures (CCC § 1410); (3) **mortgage on buildings / plant** — buildings erected by the concessionaire can be mortgaged even without owning the land (CCC § 718); (4) **right-of-way / easement** for transmission lines / pipelines (CCC § 1387). Foreign investors (SPV with foreign > 49%) cannot own land (Land Code § 86), but (a) can lease up to 50+50 years (Commercial Property Lease Act 2542); (b) BoI promotion grants land ownership in IEAT zones; (c) IEAT Free Zones allow land ownership case-by-case. We notarise the POA + Apostille for Land Office registration.

How are project finance notary fees calculated — why is % of project value forbidden?

Because Lawyers Council Code § 11 forbids contingency / % of project value fees for notarial work (to prevent conflict + inflated charges). We charge fixed fees by complexity: (a) SPV corporate pack THB 35,000; (b) CTA + ICA + SSA THB 120,000; (c) Direct Agreement pack THB 80,000; (d) security package THB 150,000 + Land Office + DBD fees; (e) sponsor support pack THB 60,000; (f) CP certificate pack THB 100,000; (g) PPP approval affidavit THB 50,000. Add-ons: Apostille THB 800 per document; sworn translation THB 600–1,200 per page; statutory stamp duty (loan 0.05% cap THB 10K, mortgage 0.05% cap THB 10K); courier at cost. A lawyer charging 1–3% of project value (USD 500M = USD 5–15M) is outside the rules — refuse and report to the Lawyers Council.

How long are project finance files retained?

**30 years** = concession term (typically 25–30 years) + (a) AMLA § 22 (5 years post-closure); (b) Customs Act 2560 § 112 (5 years); (c) Revenue Code § 87/3 + § 19 (5 years for tax); (d) CCC § 193/30 (10-year mortgage); (e) Public Debt Management Act § 32 (10 years); (f) PPP Act § 50 (concession life + 5 years). PDPA § 26 purpose-limitation. ISO 27001 + AES-256 + off-site Singapore backup + HSM. Disclosure only to client + lender syndicate + facility agent + security agent + regulators (BoT / AMLO / RD / SEC / SEPO / PDMO) + court order. Audit trail on every access — user / date / document / action logged.