Project finance — Checklist for offtake contract

Introductory note:
An offtake contract is a contract under which a third party (the offtaker) agrees to buy a certain amount of the product produced by a project at an agreed price. The product is often a commodity such as oil, gas, minerals or power.
If the project company does not secure guaranteed purchasers for its product, the lenders to the project will almost certainly want to see some assurance that the project company has identified an appropriate sales market. If the market is volatile, the project's lenders will usually want to see specific offtake contracts being agreed before the project starts operating.
This checklist is a good starting point for key issues that should be addressed by the provisions in an offtake contract.