Project finance is a specialized method of financing large-scale infrastructure and industrial projects, such as power plants, airports, highways, and pipelines, which typically require significant upfront capital investments. Unlike traditional corporate finance, which relies on the creditworthiness of a borrower, project finance is based on the cash flow and assets of the project itself.
With the help of our corporate finance experts in the United Kingdom, we specialize in transaction structuring, arranging project finances, financial modeling, and custom corporate advisory services as our client needs.
Teaming up with corporate finance experts will ensure the successful execution as we can provide advice on arranging new financing and refinancing options in addition to:
- Arranging to finance for new projects
- Financing for the acquisition of another company
- Making possible the diversification of fund sources
We approach resolving the project financing for our clients by introducing the following:
- Limited Recourse: The lenders have limited recourse to the project sponsors or developers and rely primarily on the cash flows generated by the project assets to repay the loans. This limits the financial risk to the sponsors and provides greater protection to lenders.
- Structured Financing: The financing structure is customized to the specific needs of the project and typically involves a mix of debt and equity financing, as well as other forms of financing, such as mezzanine debt, guarantees, or insurance.
- Project Assets as Collateral: The lenders take security over the project assets, such as the power plant or pipeline, to secure their loans. This provides lenders with a higher degree of certainty that they will be repaid if the project fails.
- Long-term Contracts: The project company typically enters into long-term contracts with customers or off-takers to purchase the output of the project, such as electricity or oil and gas, which provide a stable source of cash flows to repay the loans.