The construction account is designed so that all funds related to the construction of the project are distributed. If there is an engineering, purchase and construction contract (offshore and onshore) or if the project itself has onshore and offshore accounts, there will be a high currency construction account and a local currency construction account. The money is usually deposited by the borrower and lenders into the offshore construction account. For the amounts to be paid in hard currency, the borrower makes payments to the project contractors via the offshore account. When amounts are to be paid in national currency, the amounts are converted into national currency and paid into the land-based construction account so that payments to onshore contractors can be made. With regard to international project financing, it is very typical that some costs are denominated in national currency and others in strong currency. Construction company: The contractor is one of the main partners of the project during the construction phase of the project. Typically, a contractor`s tasks are based on one of two models: 1. Fixed or variable delivery: the supplier undertakes to provide the project company with a fixed quantity of delivery according to an agreed schedule or a delivery that varies between an agreed maximum and a minimum. Delivery can be made under take-or-pay or take-and-pay. Project financing is the long-term financing of infrastructure and industry projects based on projected projected cash flows from the project, not the sponsors` balance sheet.
Typically, a project financing structure includes a number of equity investors known as ”sponsors” and a ”union” of banks or other credit institutions that provide loans for the transaction. In most cases, these are non-refundable loans, secured by project assets and fully paid from project cash flows and not from the general assets or solvency of the proponents, a decision that is supported in part by financial modelling;  see project funding model. Funding is generally provided by all project resources, including revenue-generating contracts. Project proponents have a pledge right for all these assets and can take control of a project if the project company has difficulty meeting the loan terms. The Shareholders` Pact (SHA) is an agreement between the promoters for the creation of an ad hoc entity (SPC) with regard to the development of projects. It is the most fundamental structure held by sponsors in a project financing operation.