PROJECT FINANCING

Available to

Non U.S. entities and U.S. entities domicile outside or inside U.S.

Exports Supported

Capital equipment and related services for project whose repayment depends on project cash flows, usually as defined by contractual relationship.

Best used by

• Major U.S. suppliers
• Project sponsors without access to capital markets or government guarantee
• Entities out of U.S.

Coverage and Terms

• 15% cash payment by foreign buyer
• Consideration of following on case-by-case basis
• Financing of interest during construction
• Local cost financing up to 15% to 30% of U.S. contract amount
• Maximum repayment terms within OECD guidelines
• Political and comprehensive coverage options available pre- and post- completion.
• Grace period available.

A Project finance is a limited or non-recourse financing arranged in which the financial institution bases its financing criteria on the anticipated revenues from the operation of the project.

A project can be for a new development or a expansion of existing project.

Alternative to Finance a project:

• Corporate Balance Sheet
• Simple secure financing
• Structure Finance with a Guarantor
• Limited/Non Recourse Project Financing

Project Financing Structure:

-Project Company

• New
• Existing
• Consortium

Security Collateral

• Type
• Application of Revenues
• Ratios and parameters
• Accounts-Offshore and Onshore
• Control over Project
• Remedies

-Direct agreements

• Technical-Reliability
• Commercial-Equity
• Legal-Government approval
• Completion Report

-Sponsors/Partners

• Capital – Equity
• Experience
• Relations with other parties
• Risk
• Schedule of completion
• Management
• Operation and Maintenance
• Commitment
• Mitigation
• Financial Strength
• Technical and operation experience
• Insurance
• Warranties
• Completion guarantees
• Agreements

-Host Government

• Legal and Regulatory Role
• Support
• License / Concession
• Risk and Mitigation

-Construction Contractors

• Role of Contractor
• Role of Sub contractor
• Other options

-Production and Operation of the Project

• Purchase Agreement
• Supply
• Agreements
• Operation in Practice
• Demand
• Credit
• Sustainability