The FairFund Federation ('Federation') will accept Concession Funding Applications from Members, who wish to be part of investment and economic growth in an area of need. The investment will be by design, build and commissioning of a project approved by the Executive Council of the Federation. The Concession is granted by the Trustees of the Risk Mitigation Reserve Trust ('RMRT'), on authorisation by the Plenary Court, based on approval from the Executive Council. No Member has a pre-conditioned right or guarantee that the Executive Council will approve the Member's application for Concession Funding. Acceptance of applications is restricted to the Executive Council giving notice that it is open to Member's applications, subject to availability of free, clear and unencumbered cash / assets in the RMRT.
A precondition for the granting of such a Licence is that the Member or its nominee, acting as the project developer, agrees to enter a turnkey contract to design, build and commission the project within a five year period to the approved specification. Furthermore the Member must establish (with the assistance of the RMRT) that the project will be transferred into private or public ownership by the fifth anniversary. The terms and conditions to fulfill the commitment to take over the assets of the SPV are the subject of a Forward Purchase Agreement between the Member / nominee and the appointed settlement agent.
The project is the property of the SPV being a fully funded subsidiary of the Federation. The Member / nominee of the project, who has entered a Forward Purchase Agreement to buy out the SPV assets, has full use of those assets in line with the business and purpose of the project for the full duration of the five year term. The price to buy out the assets of the SPV will be matching value to the values paid out by the settlement agent over the five year term, and will be paid in the currency of the jurisdiction of the project. All capital allocated to each SPV is the capital of the RMRT, which is free, clear and unencumbered. Since there are no loans related to the funding of each SPV, therefore there are no interest charges payable. Ten percent of the project budget will be for administrative costs and charges to run the SPV.
Concession Funding is strictly in the Private Sector, due to the neutrality of the Federation, which is not permitted to have any alignment with any political, ethnic or religious grouping, nor is it permitted to accept or give loans or grants, nor to use any public funding. Building infrastructure such as rail, power, health, water, and other projects, required by the Ministries of Government (not under UN embargo) can be built in the Private Sector using the FairFund structures. There is no need to enter the tendering competition or to seek guarantees from state, central banks or other international bodies, such as the IMF or World Bank. The financing of such projects by Concession Funding is the vehicle by which the FairFund Federation delivers investment to generate economic growth and stability in the jurisdiction of the project. The project must be transferred to private or public ownership, by the fifth anniversary, by payment of matching value to the certified amounts paid to design, build and commission the project. All payments will be in local currency and that value will remain in that jurisdiction to support the indigenous banks to finance micro and mid-sized local development.
A successful applicant will receive a Conditional Offer of a Concession Licence, issued by the Federation, granting permission to establish a Special Purpose Vehicle (‘SPV’) for the delivery of a turnkey project. This Concession Licence will permit the Federation to appoint a global settlement service provider. This service provider takes responsibility as the settlement agent for the procurement of all goods and services, acquired by the SPV set up for an approved project holding a Concession Licence.