Project Finance Lenders, Insurers and Credit Rating Agencies: do they have an active Role in the Inclusion of Stabilisation Clauses in Investment Contracts?

Yatırım Sözleşmelerinin “Stabilizasyon Klozu” İçermesinde Proje Finansörleri, Sigorta Şirketleri ve 
Kredi Derecelendirme Kuruluşları Aktif Bir Rol Oynar mı?

Hakan ŞAHİN

Political risk phenomena per se are potentially destructive to all industries. However, it is fair to say that due to its high stakes, the energy industry is more acutely exposed and subject to political risk than most sectors. Therefore, the energy industry and its long-term projects require more guarantees of stability than other industries. In order to mitigate political risk, investors require host governments to agree to the insertion of stabilisation clauses along with other contractual clauses in investment agreements. This paper analyses the range of external factors other than the will of investors which may force a host state to agree to have a stabilisation clause included in its energy investment agreements. The purpose of this article is to examine whether credit rating agencies, project finance lenders and insurers play an active role in ensuring that stabilisation clauses are inserted in international investment energy agreements.

Project Finance Lenders, Insurers, Credit Rating Agencies, Stabilisation Clause, Project Finance.

Siyasal risk olgusu, kendi başına potansiyel olarak tüm endüstriler için yıkıcı niteliktedir. Nevar ki, yüksek kar payı sebebiyle, enerji endüstrisinin diğer sektörlere nazaran daha keskin bir şekilde siyasal riske maruz kaldığı da söylenmesi gereken bir gerçektir. Bu sebeple, enerji anlaşmaları ve bu anlaşmalara bağlı uzun vadeli projeler, diğer sektörlere göre daha fazla istikrara ihtiyaç duyarlar. Siyasal risk unsurunu azaltmak için, yabancı yatırımcılar, yatırım yaptıkları ülkenin hükümetinden, istikrarın devamlılığına ilişkin” stabilizasyon klozu”nu, sözleşmeye yerleştirilen diğer klozlarla beraber kabul etmesini talep etmektedirler. Bu makalenin amacı, istikrarı temin etmek maksadıyla yerleştirilen bu klozun yabancı yatırımcılar haricinde kabul edilmesinde, çeşitli dış etkenlerin de ev sahibi devletler üzerinde baskı oluşturup oluşturmadığını tespit etmektir. Bu çerçevede çalışmada, kredi derecelendirme kuruluşları, proje finansörleri, ve sigorta şirketleri tahlil edilerek, bunların “stabilizasyon klozu”nun uluslararası yatırım anlaşmasına konulmasında doğrudan aktif bir rol oynayıp oynamadıkları analiz edilecektir.

Proje Finansörleri, Sigorta Şirketleri, Kredi Derecelendirme Kuruluşları, Stabilizasyon Klozu, Proje Finans.

I. INTRODUCTION

Project finance is a financing for a project arranged in such a way that financial lenders count merely on the assets and cash flow of the project for interest and loan repayment.¹ Project finance has been one of the most popular funding models for the oil and gas industry for decades. There are a number of equity investors involved in project financing including sponsors, commercial banks and other financial lending institutions. Although project finance is the most common financing model in large-scale oil and gas projects, it is not suitable for all investment scenarios. More fragile business environments, unpredictable government behaviour and other political risk phenomena can render the financing of an international energy project challenging.

The insertion of stabilisation clauses in international investment agreements is the contractual feature most frequently required by foreign investors in their quest to obtain a stable investment environment. The motivation behind this lies in the scale and scope of the investment and the complex nature of economic development agreements. A contractual guarantee in the form of stabilisation clauses is widely considered to be a vaccine for political risks.² These contractual mechanisms are inserted by international investors in an investment contract to ensure that the contract shall not be unilaterally altered or terminated by a host government's legislative or administrative activities. In other words, by agreeing to such clauses the host state reassures the foreign private investor that certain aspects of its laws will be 'frozen' and the contractual arrangement will not be altered or terminated by the legislative or administrative activities of the host government during the life span of the project.

This article analyses the range of external factors in other than the will of investors which may force a host state to agree to have a stabilisation clause included in its energy investment agreements as well as their effect on the regulatory powers of states. It should be noted that this article does not aim to analyse stabilisation clauses and project financing from every perspective or in all its guises, as this would be beyond the scope of this paper. However, the article will touch upon the definition stabilisation clauses, project finance and why project finance is used in international investment projects.