All the lenders to the project will want security. However, it's more of an issue in project finance because initially there are no assets since you're building the assets as part of the project. So much of the lending is based on the cash flows of the projects. However, over time, assets will be built and the lenders to the SPV will take a charge on all of the assets, and that's true of all the lenders, so there won't be any unsecured lenders. Now, to reinforce this issue as a lender to the project, you're not going to rely on the assets for getting paid. You're typically going to rely on the cash flows, and therefore you really need to understand whether they're predictable or not. The second issue is that even if it is a good quality asset, in many cases, we need to distinguish between assets, which are unique and therefore difficult to sell versus assets which are sellable. So an example of a sellable asset would be an oil refinery or a power plant, but assets which are unique would be much more difficult to potentially value and sell.

So in terms of the actual documentation, this security package is pretty standard and is common to all structural transactions. There is a mortgage on all the fixed assets developed by the special purpose vehicle and on the shares of the SPV. And what that means is that if the project is not able to service the debt, the lenders can get control of the SPV and all the credits of the SPV. So if they get proceeds from insurance, they're claimed by the lenders. And furthermore, the lenders have a pledge on the current accounts managed by the agent bank, so they can claim any cash in the current accounts.