In this article we look at all important features of project financing. In a project financing,, lenders initially look to the cash flow from the project being financed rather than the corporation or corporations seeking funding. The moving party in a project is its promoter or sponsor. The ultimate goal in project financing is to arrange a borrowing for a project which will benefit the sponsor and, at the same time, be completely non-recourse to the sponsor, in no way affecting its credit standing or balance sheet. This can be accomplished by using the credit of a third party to support the transaction. Different guarantees and undertakings of different partners may be used in each time frame to provide the credit support necessary for structuring a project financing. Most large projects employ different lenders or groups of lenders because of the different risks involved as the project facility progresses through construction to operation, and the different ability of lenders to cope with and accept such risks.

project financing, SPV, sponsor, credit, lender.