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What is ''project financing'?

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Question added by Vinod Jetley , Assistant General Manager , State Bank of India
Date Posted: 2014/08/18
Vinod Jetley
by Vinod Jetley , Assistant General Manager , State Bank of India

Project finance is the long-term financing of infrastructure and industrial projects based upon the projected cash flows of the project rather than the balance sheets of its sponsors. Usually, a project financing structure involves a number of equity investors, known as 'sponsors', as well as a 'syndicate' of banks or other lending institutions that provide loans to the operation. They are most commonly non-recourse loans, which are secured by the project assets and paid entirely from project cash flow, rather than from the general assets or creditworthiness of the project sponsors, a decision in part supported by financial modeling. The financing is typically secured by all of the project assets, including the revenue-producing contracts. Project lenders are given a lien on all of these assets and are able to assume control of a project if the project company has difficulties complying with the loan terms.

Muhammad samran
by Muhammad samran , Junior Officer/Project Coordinator , Pakistan Stell Mill

project financing is a loan structure that relies primarily on the project's cash flow for repayment, with the project's assets, rights, and interests held as secondary security or collateral. 

Project finance is especially attractive to the private sector because they can fund major projects off balance sheet.

Elke Woofter
by Elke Woofter , Project Assistant , American Technical Associates

  1. Project finance is the long-term financing of infrastructure and industrial projects based upon the projected cash flows of the project rather than the balance sheets of its sponsors.
  2. In other words, project financing is a loan structure that relies primarily on the project's cash flow for repayment, with the project's assets, rights, and interests held as secondary security or collateral.

Ahmed Mohamed Ayesh Sarkhi
by Ahmed Mohamed Ayesh Sarkhi , Shared Services Supervisor , Saudi Musheera Co. Ltd.

agree with u sir :)

Is to provide for the establishment of investment projects or create new headers and use of funds for the construction of production capacities of financial resources in order to produce goods and services.

Muhammad Usman Tariq
by Muhammad Usman Tariq , Visiting Faculty , National University of Science and Technology

Financing the project until it completes can be a investment or loan. 

Saiful Islam Hiron
by Saiful Islam Hiron , Site HR Manager , Handicap International

Project financing means investment for short term in the vision of long term.

Manilyn Lozada
by Manilyn Lozada , machine operator/ qc / inspector , Unimicron Corporation / Wah Hong Corporation

project financing it is a long term method of financing o f a large infrastructure.

Divyesh Patel
by Divyesh Patel , Assistant Professional Officer- Treasury , City Of Cape Town

Project Finance is a method of funding in which the lender looks primarily to the revenues generated by a single project, both as the source of repayment and as security for the exposure. Project Finance transactions play an important role in financing development throughout the world. This type of financing is usually for large, complex and expensive installations.

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