Project finance, as it goes from its name, is used for financing of realization of a project. External finance may vary but normally does not exceed 70% from total project costs. As a rule a special purpose vehicle (the SPV) is incorporated for the project, and the SPV acts as a borrower. Profits of the SPV from the project serve as a source of repayment of debt and interest is paid regularly from the funds of the sponsors of the project. While the SPV acts as a borrower, its assets may be not sufficient collateral for the loan and the lender may also request additional security from the sponsors of the project.
Our services related to project finance may cover two principal areas:
- origination financing, which includes, per se, search of interested lenders and negotiations with them and
- financial consulting, which includes preparation of documentation required for the transaction.