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      Question

      What can be the maximum tenor of takeout finance by

      IIFCL, as a percentage of the economic life of the project?
      A 35% Correct Answer Incorrect Answer
      B 51% Correct Answer Incorrect Answer
      C 100% Correct Answer Incorrect Answer
      D 90% Correct Answer Incorrect Answer
      E 85% Correct Answer Incorrect Answer

      Solution

      The tenor of the Takeout Amount with IIFCL should not exceed 85% of the economic life of the project. In case of PPP projects approved by PPPAC/EC/EI which have provision of compulsory buyback by the authority on termination, IIFCL can remain as sole lender after other lenders are paid out. In case of non- PPP Electricity generation projects having long term power purchase agreements with state utilities for majority of its capacity, IIFCL can remain as sole lender after other lenders are paid out; however, the tenor of IIFCL Takeout should not exceed 85% of the economic life of the project. In case of such non โ€“PPP projects where IIFCL offers takeout of tenor longer than tenor of existing lenders, IIFCLโ€Ÿs risks be covered by seeking guarantees from the holding company or any other form of recourse.

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