Project Funding
This refers to a loan arrangement where the repayment is primarily dependent on the project's cash flow, with the project's assets, rights, and interests being used as secondary collateral.
Loan Amount
Tied to the Amount of Your Current Debt
Loan Term
10-30 Years
Tied to the Type of Your Project
Time to Fund
Interest Rate
Tied to Your Loan Term
What is a Project Funding?
Project funding involves financing long-term infrastructure, industrial projects, and public services through a financial structure that is either non-recourse or limited recourse. The repayment of the debt and equity utilized to fund the project is derived from the cash flow generated by the project.
What are the Benefits?
Effective Allocation of Debt
Project financing enables sponsors to obtain loans beyond their financial means. This type of loan can be viewed as an independent transaction, unaffected by the creditworthiness of the sponsors. As a result, loan terms that are more favorable and flexible can be negotiated based solely on the value and potential of the project.
Management of Risk
This significantly enhances diversity and minimizes the risk factor, shielding the parent company's stockholders from any impact resulting from changes in the project's outcome. The sponsors are only liable for the equity contribution they make, which is the maximum amount for which they are responsible.