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 INTERNATIONAL PROJECT FINANCE

Unique to project financing is the debt and repayment structure are based on the projected cash flow of the project rather than the balance sheets of the project sponsor. Usually, a project finance structure involves a number of equity participants, who can be project sponsors or equity investors, and a consortium of lenders that provide loans to the project.

Project finance loans are almost always extended on a non-recourse or limited recourse basis and are secured by the project assets and operations. Repayment of the loans occurs entirely from project cash flow, not from the assets or credit of the borrower.

Project finance and it’s complexity associate with a tremendous risks. That’s why it’s important to understand the context when embarking on international development initiatives. To help executives navigate opportunities and minimize risks, here are eight critical factors that will ensure better international project finance outcomes. Further, as financing requirements are large, loans often come under a syndicate due to the limits on single-party exposure as required by regulatory guidelines.

PROJECT FINANCING OVERVIEW

We deliver project finance solutions on a world scale along with an unalterable commitment to make every deal more profitable.

In addition to our international project services, we provide a full professional international project development service from project conception to project completion. We give you the financing you need along with deal structuring and due diligence advisory services that will help mitigate your risk and aggressively protect your interests.

With more than two decades of senior experience at some of the world’s top banks, our board gives us unparalleled expertise coupled with the strength derived from having many of the world’s top lenders and financial organizations as strategic partners. From that foundation, we develop some of the most innovative project funding solutions in the world and source unique project funding alternatives through capital markets and lenders worldwide. We also enhance your project with the capabilities of a global funding team with a history of successfully funding some of the most challenging and complex international financing projects in the world. In order to successfully obtain finance for a project it is first absolutely essential to generate a complete set of comprehensive and credible project documentation.

In most projects, we research and compile the core studies and analyses:

• Marketing Feasibility Study
• Financial Feasibility Study
• Business Plan
• Development Budget
• Initial Outline Architectural Master Plan
• Final Architectural Master Plan
• Environmental Impact Assessment
• Social Impact Study
• Information and Communication Technology Survey

With some projects we only verify this documentation providing the documentation has been compiled by internationally experienced analysts recognized by us.

Our expertise in delivering successful project financing packages and our innate ability to match the right project with the right lenders, architects, engineers, consultants, builders, developers and all of the professionals your project will need is uncanny. Doing it seamlessly and at the right time gives us all the tools we need to arrange and deliver extraordinary financial solutions for challenging, difficult to place loans and projects.

Sustainability in international project financing means delivering at the most difficult of times. By exploiting our strengths and core expertise in project finance we are often successful at placing project development loans for clients whose financing has been declined by other financiers and lenders. If your project has been turned down, we can help. We’ll pre-underwrite your project financing to see if we can successfully fund your project where others have failed. Submit a Project Finance Request now and we’ll get your financing started today.

Project finance is the lending structure that has financed a great many of the massive infrastructure and sovereign projects in emerging market countries throughout the world.

Underwriting for project development loans focuses on what is usually a business plan that includes extensive financial modeling and sensitivity analysis. The financing is typically secured by all of the project assets, including the revenue-generating components of the project. Lenders are granted a lien on all of the project assets and are further granted the right to assume managerial and operational control of a project, along with the mechanism to do so if the project doesn’t comply with the loan terms.

The borrower is typically a Special Purpose Entity or SPE which is created in the project finance documents specifically to own the project. The SPE ownership structure coupled with non-recourse debt effectively shields the assets of both the project sponsor and equity investors from collection efforts or deficiency actions if the project fails.

With collection actions barred if the deal fails, project lenders often require a commitment from the project owners to contribute capital to the project to ensure the project is sufficiently capitalized and financially sound, and also to demonstrate the project sponsors’ commitment to the deal.

Project finance is significantly more complex than traditional corporate finance or real estate lending. Historically international project finance has been used for mining, telecom, transportation and communication, water and electric utility distribution, and major public infrastructure projects.

Allocation of the risk stack among project participants is a key component of project finance. Project developments are often subject to technical, environmental, economic and political risks, particularly in developing countries and frontier and emerging markets. If the lenders or project sponsors determine that the risk exposure is too great during underwriting, the project is rendered unfinanceable.

Long-term contracts for construction, supply, off-take, operations and concessions, along with contracts establishing joint-ownership of the project are structured in extensive project documentation to best align the interests and incentives of all the project participants. They are also designed to dissuade bad behavior on the part of the deal participants. In this way, project risk is allocated amongst the deal participants who are best able to manage the risk.

The amounts involved in project development financing are often so vast that no single lender could or should provide the entirety of the project financing. Instead, the project financing is often syndicated to a consortium of lenders to distribute the risk.

Project financing was used as far back as the ancient Greeks and Romans to finance maritime voyages. It was project finance that funded construction of the Panama Canal and the North Sea oil wells.

Today, most project financing is deployed in developing countries around the world where the need for project financing remains high and will for the foreseeable future. As more countries move from frontier to emerging economies demand for public utilities and infrastructure will continue to increase.

PROJECT FINANCE PARTICIPANTS

There are several parties in a project financing depending on the type and the scale of a project. The usual suspects include, but are not limited to the following:

• Sponsors
• Lenders
• Financial Advisors
• Legal Advisors
• Debt Financiers
• Equity Investors
• Regulatory Agencies
• Multilateral Agencies

FINANCIAL MODELING

A financial model is constructed by the sponsor as a tool to conduct negotiations with the investors and prepare a project appraisal report. The model is usually a computer spreadsheet designed to process a comprehensive list of input assumptions and to provide outputs that reflect the anticipated real life interaction between data and calculated values for a particular project.

Properly designed, the financial model is capable of sensitivity analysis, i.e. calculating new outputs based on a range of data variations.

Get Financing For Your Project Today

Unparalleled underwriting expertise uniquely positions us to identify financing obstacles and improve deal structure to minimize risk and attract lenders. Then we present an optimized loan package to our worldwide network of lenders and investors resulting in project finance with the best terms and least risk in the industry.

Havelet Finance Limited can help you get all the Project Financing you need. Contact us 

Website: https://www.havelet-finance.com/project-finance
Email: credit@havelet-finance.com