Key issues in an offtake agreement

With continued depressed commodity prices putting pressure on projects and their financing, the offtake agreement is contenting to be one of the most important documents in a project finance transaction. The offtake agreement is the agreement pursuant to which the off-taker buys all or a substantial portion of the output from the facility and provides the revenue stream supporting a project financing. Broadly stated, the key factors to consider in an offtake agreement are the term, price, and creditworthiness of the off-taker.

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