Common use of Payment Security Mechanism Clause in Contracts

Payment Security Mechanism. (A) Letter of Credit (LC): 2.5.1 The Buying Entity shall provide to SECI, in respect of payment of its Monthly Bills, a single, unconditional, revolving and irrevocable letter of credit (“Letter of Credit”), opened and maintained by the Buying Entity, which may be drawn upon by SECI in accordance with this Article. The Buying Entity shall provide SECI draft of the Letter of Credit proposed to be provided to SECI two (2) months before the Scheduled Commissioning Date. 2.5.2 Not later than one (1) Month before the Start of Supply, the Buying Utility shall through a scheduled bank at [insert the place] open a Letter of Credit in favour of SECI, to be made operative at least 15 days prior to the Due Date of its first Monthly Xxxx under this Agreement. The Letter of Credit shall have a term of twelve (12) Months and shall be reviewed for every six (6) months, and revised w.e.