Common use of Payment Security Fund Clause in Contracts

Payment Security Fund. In addition to provisions contained in Article 2.6 above, the Buying Entity may provide Payment Security Fund, which shall be suitable to support payment of at least 3 (three) months’ billing, of all the Projects tied up with such fund. The parties agree that proceeds of encashment of PBGs upon default of the BESSD under the respective BESPA shall be passed on to the Buying Utility subsequent to opening of the above Payment Security Fund. It is hereby clarified that the State Government guarantee shall be invoked only after the SECI has been unable to recover its dues under the BESSA by means of the Letter of Credit and the Payment Security Fund as provided by buying entity.