Draft Markup Concession Agreement Ccgt Mexico

Skill: Draft Markup of Concession Agreement with Commentary — Project Company Perspective

1. Subject-matter triage

• Treat the concession as a bankability document first and a commercial allocation document second.
• Read the lender term sheet, bankability letter, and any direct agreement before revising operative clauses; align the markup to lender-facing requirements even where the grantor resists them.
• Identify whether the agreement already addresses:
  • lender cure and step-in,
  • termination payment mechanics,
  • force majeure and change in law,
  • site delivery and delay relief,
  • currency conversion or tariff adjustment,
  • dispute resolution against a public counterparty,
  • indemnities and security package calibration.
• If any of those topics are missing or thin, treat that as a drafting gap, not a negotiation preference.

2. Failure modes the skill is correcting

• Produces cosmetic edits that do not translate into a usable .docx redline or plain-text review record.
• Flags issues without tying them to the actual bankability package the lenders require.
• Describes a problem without stating what to change, why it matters, and where the fallback sits.
• Fails to separate must-have protections from points that can be traded.
• Drafts termination, currency, or dispute provisions in a way that leaves gaps between the concession and the financing documents.
• Gives commentary that is readable but not actionable for negotiation.

3. Legal frameworks / domain conventions that apply

• Lender step-in and cure rights are a standard project-finance bankability feature; the concession language should not leave lender protections dependent on implied consent.
• Termination compensation should be drafted to address debt exposure, equity recovery concepts, and breakage costs with a clear calculation path; the controlling drafting principle is certainty of remedy in a public-concession context.
• Delay liquidated damages should be capped and paired with a coherent period and rate so the clause functions as a loss allocation mechanism rather than a punitive device.
• Currency risk provisions should use a trigger-and-adjustment structure when project revenues and debt service sit in different currencies; coordinate this with the change in law regime so the same event is not priced twice or left unaddressed.
• Site delivery delays by the grantor should be paired with extension-of-time relief and documented standby-cost recovery tied to actual project delay consequences.
• Dispute resolution with a governmental counterparty should preserve neutrality and enforceability through international arbitration architecture and a neutral seat where possible.
• Indemnity drafting should be mutual, scoped to direct third-party loss concepts where market practice supports it, and calibrated with thresholds and caps that are consistent with the project risk profile.
• Performance security should track market practice for the project type; excess security can distort economics, while insufficient security can undermine lender and grantor acceptance.

4. Analytical scaffolds

• Build the markup provision by provision, and for each provision ask:
  • Is the current drafting acceptable?
  • If not, is it negotiable with improvement or unacceptable as-is?
  • What text should replace or supplement it?
  • What is the negotiated fallback if the grantor rejects the preferred position?
• For every substantive change, use a plain-text marker that survives export:
  • [DELETED: …]
  • [INSERTED: …]
  • [REPLACED: old → new]
  • Add a short [Rationale: …] note immediately adjacent to the change.
• Do not rely on formatting alone to signal redlines; the substantive change must remain visible in the text stream.
• Where a clause has multiple moving parts, draft the full revised clause rather than isolated fragments so the interaction of definitions, triggers, and remedies is clear.
• If the agreement turns on more than one period, party, trigger, or payment condition, separate them before analysis and address each in turn rather than collapsing them into a single representative treatment.
• For termination payment provisions, state the calculation concept in modular form: outstanding debt, accrued amounts, breakage, and equity recovery logic, with a generic illustration only if it clarifies the methodology without importing scenario-specific arithmetic.
• For currency provisions, specify the trigger, the adjustment mechanism, and the interaction with change in law and tariff/payment clauses.
• For dispute resolution, draft the forum, seat, governing procedure, interim relief path, and enforcement-facing language as a coordinated package.

5. Vertical / structural / temporal relationships

• Cross-check the concession against any direct agreement, financing covenant, security document, or permit package that depends on the same default, cure, or payment trigger.
• Make sure a grantor default, force majeure event, change in law event, and prolonged site delay do not create overlapping or contradictory remedies.
• Where one clause depends on another, preserve sequencing:
  • event occurs,
  • notice/cure period runs,
  • compensation or extension right crystallizes,
  • dispute mechanism applies if the parties disagree.
• Keep the project-company and lender perspectives aligned: if lender rights are intended to be exercisable, the concession should not reserve a prohibition elsewhere that nullifies them.
• When a remedy has a cap or threshold, ensure the related definition, timing rule, and recovery formula operate together.
• If the concession includes multiple counterparties or documents, identify the controlling instrument for each remedy and avoid drafting that requires readers to infer priority.

6. Output structure conventions

• Produce two files:
  • concession-agreement-markup.docx
  • markup-commentary-memo.docx
• The markup file should present the revised agreement text with robust textual redline markers and adjacent rationale notes for each substantive change.
• The commentary memo should be organized by provision, and each entry should include:
  • issue identification,
  • severity on a uniform ordinal scale defined at the top of the memo,
  • rationale for the change,
  • negotiability assessment,
  • fallback position,
  • downstream consequence if left unaddressed.
• Use clear bankability labels in the memo so the reader can distinguish lender-required points from commercially negotiable items.
• For each issue, reference the relevant clause interaction and the practical impact on project cost, schedule, enforceability, or financeability.
• End the memo with a concise Recommended Actions block that assigns each action to a role and a timing anchor tied to the transaction workflow.
• Before finishing, confirm that the markup file and the memo file both exist, are non-empty, and contain operative drafting rather than only commentary about drafting.