We provide loans and project finance
Global Projects Finance Group provides various types of loans and project finance options.
Project finance is the financing of long-term infrastructure, industrial projects and public services using a non-recourse or limited recourse financial structure. Project financing is a loan structure that relies primarily on the project’s cash flow for repayment, with the project’s assets, rights, and interests held as secondary collateral.
One of the primary advantages of project financing is that it provides for off-balance-sheet financing of various types of projects, which will not affect the credit of the shareholders or the government contracting authority, and shifts some of the project risks to the lenders in exchange for which the lenders obtain a higher margin than for normal corporate lending.
Project Finance Structure
The typical project financing structure for a build, operate and transfer (BOT) project is shown below. The key elements of the structure are:
- Special purpose vehicle (SPV) project company with no previous business or record;
- Sole activity of project company is to carry out the project – it then subcontracts most aspects through construction contract and operations contract;
- For new build projects, there is no revenue stream during the construction phase and so debt service will only start once the project is on the line during the operations phase (parties, therefore, take significant risks during the construction phase);
- Sole revenue stream likely to be under an off-take or power purchase agreement;
- There is limited or no recourse to the sponsors of the project (shareholders of the project company are generally only liable up to the extent of their shareholdings);
- The project remains off-balance-sheet for the sponsors and for the host government.