A customer’s signature is the beginning of the revenue story

A signed offtake agreement can give a project a stronger revenue story. It can also invite a mistaken shortcut: assuming that contracted demand is the same as dependable cash.

The underlying agreement matters. So does the organisation expected to perform it.

World Bank project-finance guidance places revenue and risk allocation at the centre of bankability. For sponsors, the task is to explain how the customer relationship works under both normal conditions and pressure.

Read the commercial obligations together

Quantity, quality, price, delivery and payment terms interact. A buyer may have conditions before accepting goods, rights to reduce purchases or a payment timetable that creates a working-capital requirement for the seller.

The project also has obligations. If it cannot meet specifications or deliver consistently, the contract may not generate the revenue shown in the model. Technical capacity and commercial promises need to be assessed together.

Counterparty analysis adds another layer. Authority to sign, ability to pay and any supporting security deserve attention. The existence of a familiar name on a document does not settle those questions.

Test the gaps before relying on the forecast

A useful model should reflect the contract’s actual mechanics, including timing and realistic downside assumptions. Where terms are still under negotiation, identify that status rather than presenting the preferred outcome as settled.

B&A’s view is that a good offtake arrangement makes the revenue case more specific and testable. It should help a financier understand what the customer owes, what the project must deliver and what happens when either side falls short.

The signature creates obligations. The investment case depends on their quality and performance.