DIFFERENCE BETWEEN

ESCROW & TRA

Escrow A/c
It is a mechanism to protect the borrower
(project co.) from its customers from
payment risk for sales made by former to
latter
It removes control over the cash flows from
the customers to an independent party
(escrow agent)
The customers of project will direct their
revenue stream to be deposited to the
escrow agent without receiving the same

Escrow A/c
The escrow agent will then allocate the funds
in the a/c as per the priority mandated in the
escrow agreement
The terms & conditions of the escrow
agreement would be finalised by lenders in
consultation with the project co. & its
customers
Escrow arrangement generally involves four
parties: 1. lender, 2. borrower (project co.), 3.
customers of project co. & 4. escrow agent

TRA
It is a mechanism to protect the lenders
from credit risk of lending to the project
co.
It removes control over the cash flows
from the borrower to an independent
party (TRA agent)
All revenues of the project co. would be
directed to the TRA a/c maintained by
the TRA agent
The TRA agent appropriates the funds

TRA
The TRA agreement is a tri-partite
agreement between: 1. lenders, 2.
project co. & 3. TRA agent
The T&C in the TRA agreement would
be finalised by the lenders in
consultation with the project co.
The TRA may be sub-divided into
several sub-TRAs with dedicated
purposes / expenses