Everand Logo

Welcome to Everand!

  • Discover millions of ebooks, audiobooks, and so much more with a free trial

    Only $11.99/month after trial. Cancel anytime.

    Project Finance
    Project Finance
    Project Finance
    Ebook32 pages28 minutes

    Project Finance

    By IntroBooks Team

    ()

    Switch to audiobook
    Read preview

    About this ebook

    Long term financing of industrial and infrastructure project is
    often referred as project finance. The finances are not based
    on the balance sheets of their sponsors. Instead, it is based on
    the flaws of cash of that particular project. Various parties are
    involved in project finance. A number of equity investors are
    involved. They are known as sponsors too. A bank or other
    lending agencies also needs to get involved in order to lend
    financial support or simply loan for various operations. Often,
    these kinds of loans are non-recourse loan. Non-recourse loan
    cannot be paid with general assets or trustworthiness of the
    project sponsors. These loans are secured and paid with the
    cash flow of the project only. This method is supported by
    standard model of finance. Revenue producing contracts and all
    project assets are used to secure the finances. A lien over the
    assets is provided to project lenders. Lenders are given
    privileges are given to the lenders to take control over the
    project if the related company is facing difficulties or not
    complying with various terms of the loan.
    In order to shield other assets of project sponsors to save
    themselves from detrimental effects or project failures special
    purpose entities are created for almost every project. Special
    purpose entity indicates that there are no assets owned by the
    related company other than those in the project. Financial
    soundness of the project is assured by capital contribution
    commitment of the owners. Such commitments also ensure the
    commitment of leaders towards the sponsors. Project finance
    method is comparatively complex than other alternative financing
    methods. This method is widely used in the area of mining,
    transport and communications projects. Project finance is
    nowadays highly growing in the field of sports and
    entertainment also.
    Identifying risks and allocating them efficiently is important
    aspect of project finance. There are various risks involved in a
    project such as technical risks, environmental and economic
    risks and political risks as well. These risks are even noticeable
    in developing countries and newly emerging markets. These
    risks are considered unacceptable or un-financeable by most of
    the financial institutions and project sponsors. Various delivery
    methods are implemented in project finance in order to avoid
    or decrease these risks. These methods are nothing by various
    implementation patterns of the project in order to manipulate
    outputs. According to methods, if risks are a little bit higher,
    the financing of that project is distributed between more than
    single parties that can be any number more than one. It will
    make it sure that both the risk and profit are distributed
    among several parties equally and in less amount.

    LanguageEnglish
    PublisherIntroBooks
    Release dateNov 23, 2019
    ISBN9781393780274

    Read more from Intro Books Team

    Related to Project Finance

    Related ebooks

    Finance & Money Management For You

    View More
    View More

    Related podcast episodes

    Related articles

    • Article

      Fuelling Economic Growth

      Feb 6, 2020

      Fuelling Economic Growth
      16 min read

    • Article

      Ppps And Fm

      Mar 28, 2019

      Ppps And Fm
      3 min read

    • Article

      Building Financial Resilience

      Aug 18, 2023

      THE CURRENT ECONOMIC epoch is fascinating, and India’s exceptional achievements make the country stand out. The country has successfully handled several challenges, including healthcare issues during the Covid-19 outbreak and recent events in Europe,

      3 min read

    • Article

      Q&A with Garth Davis, CEO of New Market Funds

      May 1, 2018

      Should institutional investors consider impact investments in real assets? We have spent a fair bit of time speaking with — and frankly, educating — institutional investors on investing in affordable housing, specifically because it should be one of

      2 min read

    • Article

      How Infrastructure Borrowing Can Benefit Hong Kong For Decades To Come

      Feb 24, 2024

      Faced with a deficit of more than HK$100 billion (US$12.8 billion) this financial year, the Hong Kong government has proposed issuing bonds to finance large-scale infrastructure projects that could include the Northern Metropolis and land reclamation

      4 min read

    • Article

      Commercial Paper’s Worth The Paper It Is Written On

      Jul 29, 2023

      Commercial paper is a type of debt instrument issued by funders, which are not necessarily registered banks or authorised credit providers, to provide finance to companies to cover their short-term operational needs, or as the bean counters call it –

      3 min read

    • Article

      Commercial Paper’s Worth The Paper It Is Written On

      Jul 29, 2023

      Commercial paper is a type of debt instrument issued by funders, which are not necessarily registered banks or authorised credit providers, to provide finance to companies to cover their short-term operational needs, or as the bean counters call it –

      3 min read

    • Article

      Commercial Paper’s Worth The Paper It Is Written On

      Jul 29, 2023

      Commercial paper is a type of debt instrument issued by funders, which are not necessarily registered banks or authorised credit providers, to provide finance to companies to cover their short-term operational needs, or as the bean counters call it –

      3 min read

    • Article

      Go For A Vibrant Bond Market

      Aug 19, 2021

      The pandemic has not only altered the country’s economic trajectory, it has also brought to the fore the need to focus on social infrastructure. For long, nature has been warning us to shift towards sustainable growth models. Government policy and di

      5 min read

    • Article

      Reality Check: What The New Agri Master Plan Is Really About

      Jun 3, 2022

      Minister of Agriculture, Land Reform and Rural Development Thoko Didiza, along with several agricultural and agribusiness groupings, signed the Agriculture and Agro-processing Master Plan in Parliament on 12 May. The process was the culmination of tw

      3 min read

    • Article

      A Strong Foundation

      May 13, 2019

      A Strong Foundation
      2 min read

    • Article

      Beast Of Burden

      Mar 6, 2022

      Beast Of Burden
      3 min read

    • Article

      Revival 2021

      May 14, 2021

      InfoPro has launched ‘Revival 2021’, a full-fledged program aimed at advancing out-of-the-box measures that address the country’s extraordinary circumstances. It is an emergency proposal for the short-term (five years). It builds on previous editions

      5 min read

    • Article

      Let’s Broaden The Horizon For Retail Investors

      Aug 6, 2021

      unlisted or alternative funds, including the various subsets of infrastructure and development and impact funds, have traditionally been unavailable to retail investors, other than some access to private equity (PE) funds by high-net-worth individual

      3 min read

    • Article

      Shades of Green

      May 4, 2021

      Shades of Green
      2 min read

    • Article

      A High Risk Game

      Jul 25, 2020

      A High Risk Game
      4 min read

    • Article

      Building Infra in an Investment Boom

      Jan 21, 2022

      AS THE DECKS ARE CLEARED for Budget 2022-23 in the long shadow of the pandemic, budgetary allocations on infrastructure will impact the pace of economic activity and renewed growth. It goes beyond academic interest, therefore, to understand how the g

      5 min read

    • Article

      Roads to Wherewithal

      Aug 20, 2018

      Roads to Wherewithal
      3 min read

    • Article

      Roads to Wherewithal

      Aug 20, 2018

      Roads to Wherewithal
      3 min read

    • Article

      Legal And Regulatory Policies Impeding Agri Financing In Africa

      May 27, 2022

      Drawing on lessons from East Africa, which may mirror those elsewhere in Africa, there are five main legal and regulatory policies that impede agricultural financing: • International financial reporting standards (IFRS 9). This requires banks to prov

      3 min read

    Related categories

    Reviews for Project Finance

    0 ratings

    0 ratings0 reviews

    What did you think?

    Tap to rate

    Review must be at least 10 words

      Book preview

      Project Finance - IntroBooks Team

      Project Finance

      IntroBooks #270

      readintrobooks.com

      Copyright © 2016 Can Akdeniz

      All rights reserved.

      PREFACE

      Long term financing of industrial and infrastructure project is often referred as project finance. The finances are not based on the balance sheets of their sponsors. Instead, it is based on the flaws of cash of that particular project. Various parties are involved in project finance. A number of equity investors are involved. They are known as sponsors too. A bank or other lending agencies also needs to get involved in order to lend financial support or simply loan for various operations. Often, these kinds of loans are non-recourse loan. Non-recourse loan cannot be paid with general assets or trustworthiness of the project sponsors. These loans are secured and paid with the cash flow of the project only. This method is supported by standard model of finance. Revenue producing contracts and all project assets are used to secure the finances. A lien over the assets is provided to project lenders. Lenders are given privileges are given to the lenders to take control over the project if the related company is facing difficulties or not complying with various terms of the loan.

      In order to shield other assets of project sponsors to save themselves from detrimental effects or project failures special purpose entities are created for almost every project. Special purpose entity indicates that there are no assets owned by the related company other than those in the project. Financial soundness of the project is assured by capital contribution commitment of the owners. Such commitments also ensure the commitment of leaders towards the sponsors. Project finance method is comparatively complex than other alternative financing methods. This method is widely used in the area of mining, transport and

      Enjoying the preview?
      Page 1 of 1