Project Finance in India: Legal Issues & Concerns

TABLE OF CONTENTS
DECLARATION;
ACKNOWLEDGEMENTS;
1. BACKGROUND OF RESEARCH;
1.1. CHALLENGES CONFRONTING PROJECT FINANCING IN INDIA;
1.2. RESEARCH METHODOLOGY;
1.3. RESEARCH HYPOTHESIS;
1.4. RESEARCH QUESTIONS;
1.5. RESEARCH OBJECT;
1.6. SCOPE OF RESEARCH;
1.7. METHOD OF WRITING;
1.8. SOURCES OF DATA;
1.9. MODE OF CITATION;
2. INTRODUCTION;
2.1. NEED FOR PROJECT FINANCE IN A COUNTRY LIKE INDIA;
2.2. How DOES PROJECT FINANCE GENERATE FUNDS;
2.3. AN OVERVIEW OF THE BASIC STRUCTURE OF PROJECT FINANCE;
3. FUNDAMENTALS OF PROTECT FINANCE;
3.1. WHY CHOOSE PROJECT FINANCE;
3.1.1. PUBLIC FINANCE;
3.1.2. CORPORATE FINANCE;
3.1.3. PROJECT FINANCE;
3.2. THE KEY CHARACTERISTICS OF PROJECT FINANCE;
4. PROJECT FINANCE: STRUCTURE, FUNDING AL TERNA TIVES AND RISK SHARING;
4.1. PROJECT FINANCE STRUCTURES;
4.1.1. A JOINT VENTURE;
4.1.2. A PARTNERSHIP;
4.1.3. AN INCORPORATED BODY (LIMITED COMPANY);
4.2. PROJECT FUNDING ALTERNATIVES;
4.2.1.TYPES OF SECURITIES THAT CAN BE USED FOR PROJECT FINANCING;
4.2.1.1. COMMON EQUITY;
4.2.1.2. PREFERRED EQUITY;
4.2.1.3. CONVERTIBLE DEBT
4.2.1.4. UNSECURED DEBT;
4.2.1.5. SECURED DEBT;
4.2.2 PROJECT FUNDING OPTIONS AVAILABLE WITH THE BANKS;
4.2.2.1 CONSTRUCTION FINANCING;
4.2.2.2 BRIDGING FINANCE;
4.2.2.3 LINE OF CREDIT FUNDING;
4.2.3 PARTIES TO PROJECT FINANCE;
4.2.3.1 PROJECT COMPANY/BORROWER;
4.2.3.2 PROJECT SPONSORS/SHAREHOLDERS;
4.2.3.3 THIRD PARTY EQUITY;
4.2.3.4 BANKS;
4.2.3.5 FACILITY AGENTS;
4.2.3.6 TECHNICAL BANK;
4.2.3.7 INSURANCE BANK/ACCOUNT BANK;
4.2.3.7.1 INSURANCE BANK;
4.2.3.7.2 ACCOUNT BANK;
4.2.3.8 MULTILATERAL AND EXPORT CREDIT AGENCIES;
4.2.3.9 CONSTRUCTION COMPANY;
4.2.3.10 OPERATOR;
4.2.3.11 EXPERTS;
4.2.3.12 HOST GOVERNMENT;
4.2.3.13 SUPPLIERS;
4.2.3.14 PURCHASERS;
4.2.3.15 INSURERS;
4.2.3.16 OTHERPARTIES;
4.3 SHARING OF RISKS;
4.3.1 INDICATION AND ALLOCATION OF RISKS;
4.3.2 CONCERNS OF THE LENDERS;
4.3.3 GROUND RULES;
4.3.4 CATEGORIES OF PROJECT RISKS;
5 REGULATION OF PROJECT FINANCE;
5.1 DISTINCTIVE CHARACTERS OF PROJECT FINANCE REGULATION;
5.1.1 ESTABLISHMENT OF OFFICIAL REGULATOR HAVING WIDE POWERS;
5.1.2 CRIMINALIZATION OF THE LAW;
5.2 MAIN HEADS OF FINANCIAL REGULATION;
5.2.1 OFFICIAL AUTHORISATION OF INVESTMENT BUSINESS;
5.2.2 FINANCIAL SUPERVISION OF FIRMS;
5.2.3 CODES OF CONDUCT ENHANCING AGENCY AND FIDUCIARY DUTIES;
5.2.4 MARKET FRAUDS;
5.2.5 PROSPECTUS AND FINANCIAL PROMOTION;
5.2.6 INVESTOR COMPENSATION FUNDS;
5.2.7 OTHER HEADS OF REGULATION;
5.2.7.1 FINANCIAL STATEMENTS;
5.2.7.2 CORPORATE GOVERNANCE;
5.2.7.3 TAKEOVER REGULATION;
5.2.7.4 LIMITATION ON ENTITIES ENTITLED To RAISE MONEY FROM THE
PUBLIC;
5.2.7.5 CONTROL ON THE TERMS OF SOCIETIES;
5.3 MICROECONOMIC REGULATION;
5.4 LAW AND INSTITUTIONS OF PROJECT FINANCING IN INDIA;
5.4.1 RESERVE BANK OF INDIA (RBI);
5.4.1.1 INDIAN POLICY ON FOREIGN DIRECT INVESTMENT IN GENERAL;
5.4.1.2 PROCEDURE UNDER AUTOMATIC ROUTE;
5.4.1.3 PROCEDURE UNDER GOVERNMENT APPROVAL;
5.4.1.4 PROHIBITED SECTORS;
5.4.1.5 GENERAL PERMISSION UNDERFEMA;
5.4.1.6 INDUSTRIAL LICENSING;
5.4.1.7 INDUSTRIES REQUIRING COMPULSORY LICENSE;
5.4.1.8 PROCEDURE FOR OBTAINING AN INDUSTRIAL LICENSE;
5.4.1.9 SMALL SCALE SECTOR;
5.4.1.10 LOCATIONAL RESTRICTIONS;
5.4.1.11 ENVIRONMENTAL CLEARANCES;
5.4.2 SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI);
6 DEFICIENCIES IN THE INDIAN REGULATORY FRAMEWORK;
6.1 LACK OF RISK CAPITAL TO SUPPORT DEBT RAISING;
6.2 CHALLENGES RELATING TO MONETARY MANAGEMENT;
6.3 INSTITUTIONAL CONSTRAINTS;
6.3.1 LIMITED PARTICIPATION OF INSURANCE COMPANIES IN PROJECT
FINANCE;
6.3.2 IMPROPER UTILIZATION OF SPECIALIZED NBFCs;
7 CONCLUSION AND SUGGESTIONS;
8 BIBLIOGRAPHY.