Project Finance in Theory and Practice: Designing, Structuring, and Financing Privateand Public Projects

Abstract

This is a timely book examining an extremely timely topic. During the past threedecades, project finance has emerged as an important method of financing large-scale, high-risk domestic and international business ventures. This is usually definedas limited or nonrecourse financing of a new project to be developed through theestablishment of a vehicle company (separate incorporation). Thus the distinguishingfeatures of project finance (PF) are, first, that creditors share much of the venture’sbusiness risk and, second, that funding is obtained strictly for the project itselfwithout an expectation that the corporate or government sponsor will coinsure theproject’s debt—at least not fully. PF is most commonly used for capital-intensiveprojects, with relatively transparent cash flows, in riskier-than-average countries,using relatively long-term financing, and employing far more detailed loan covenantsthan will conventionally financed projects