Discover project finance fundamentals through articles, case studies, and tips for securing large-scale project funding. Ideal for all project owners seeking funding.
What is Project Finance? Project finance is a specialized financing method used for large-scale infrastructure, energy, and industrial projects. Unlike traditional corporate finance, it relies on the project’s future cash flow as collateral rather than the borrower’s balance sheet. If the project fails, lenders can only recover their funds from the project itself—not from the
What is Private Debt? Private debt refers to loans provided by non-bank lenders, such as private credit funds, institutional investors, or specialized financing firms.3 These lenders offer debt financing directly to businesses or project owners, often for projects that require significant capital or have unique characteristics.1,2 Key Points: Private debt offers flexible, customized loan terms,
What Are Capital Projects? Capital projects are large-scale, long-term investments in infrastructure, energy, transportation, or industrial developments. These projects often require significant financing—typically $100 million or more—and can take years to complete. Examples include: Capital projects are critical for economic growth but come with unique financing challenges due to their scale, complexity, and risk profile.1,
Key Points: Infrastructure project finance is a financing method for large-scale projects (e.g., roads, energy plants) where repayment is based on the project’s cash flow, not the sponsor’s assets. Non-Recourse Structure: Lenders rely solely on project revenue, minimizing risk for sponsors and attracting diverse investors. Risk Allocation: Risks (construction, operational, financial) are shared among stakeholders, ensuring smoother
Key Points: Understand Financing Structures: Renewable energy projects are typically funded through a mix of debt (loans), equity (investor capital), and government incentives (tax credits, grants). Non-recourse project finance, where repayment relies on project cash flows, is a common and attractive option. Leverage Revenue Stability: Secure long-term Power Purchase Agreements (PPAs) or offtake agreements to
Key Points: Oil and gas projects can be funded through Reserve-Based Lending (RBL), project finance, joint ventures, royalty financing, or debt/equity financing. Choose the option that aligns with your project’s stage, risk profile, and cash flow potential. Tailor your financing strategy to your sector: use RBL or joint ventures for upstream exploration, project finance for
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