What is... A BLT Agreement

One scenario that Capital Corp Merchant Banking is approached with to provide financing for is “Build, Lease, Transfer” arrangements - “BLT” for short.

In this type of arrangement, a developer designs and builds the complete facility. Sometimes these facilities are large scale industrial projects such as power plants, airport, ports, etc - and sometimes they are smaller facilities.

Upon completion, according to the complete “BLT” agreement, the developer leases the facility to the government for a pre-determined time frame. Therefore ownership stays with the developer while some costs are recouped from leased payments. At the end of the lease, the facility is then sold outright to the government, also at a previously agreed price.

An investor, such as Capital Corp Merchant Banking, would assist during the initial stages of the “BLT” and provide financing for the project to be constructed. “BLT” arrangements are tailored to high country risk areas because of ownership and operational exposure.