Project Finance

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Project Finance

Project financing is an innovative and timely financing technique that has been used on many high-profile corporate projects, such as the Eurotunnel. Employing a carefully engineered financing mix, it has long been used to fund large-scale natural resource projects, from pipelines and refineries to electric-generating facilities and hydro-electric projects. Increasingly, project financing is emerging as the preferred alternative to conventional methods of financing infrastructure and other large-scale projects worldwide.

This alternative includes understanding the rationale for project financing, how to prepare the financial plan, assess the risks, design the financing mix, and raise the funds. SI has the knowledge-base required as to:

  • the design of contractual arrangements to support project financing;
  • issues for the host government legislative provisions;
  • public/private infrastructure partnerships;
  • public/private financing structures;
  • credit requirements of lenders, and how to determine the project’s borrowing capacity;
  • how to prepare cash flow projections and use them to measure expected rates of return;
  • tax and accounting considerations;
  • analytical techniques to validate the project’s feasibility.

Our firm´s expertise can help you with your particular project, such as a mine, toll road, railway, pipeline, power station, ship, hospital or prison, which is repaid from the cash-flow of that project. In this form of finance, the financier principally looks to the assets and revenue of the project in order to secure and service the loan.

In contrast to an ordinary borrowing situation, in a project financing the financier usually has little or no recourse to the non-project assets of the borrower or the sponsors of the project. In this situation, the credit risk associated with the borrower is not as important as in an ordinary loan transaction; what are most important are the identification, analysis, allocation and management of every risk associated with the project, which are part of our consultancy and assistance.

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