PROJECT SPONSOR

The project sponsor is the entity, or group of entities, interested in the development of the project and that will benefit, economically or otherwise, from the overall development, construction, and operation of the project. It is sometimes called the developer. The project sponsor can be one company or a group of companies.

PROJECT COMPANY

The project company is the special-purpose entity that will own, develop, construct, operate, and maintain the project. The precise nature of organization for this entity is dependent upon a myriad of factors.

Of foremost concern is the local law of the country in which the project is based. The local law must be examined to determine, for example, whether a form of organization is prescribed; whether a foreign entity can do business in the host country; whether a foreign entity can own real property in the host country; the extent to which liability limitations, such as is enjoyed by a corporation or limited liability partnership, is permissible; requirements for local investor participation in the entity organized in the host country; and similar concerns.

Other factors also influence the selection of the form of organization for the project company. These include tax laws in the host country, tax treaties, and foreign exchange rules of the host country.