What is project finance in India?

Project finance is the long-term financing of infrastructure and industrial projects based upon non-recourse or limited alternative of financial structure where project debt and equity used to finance the project are paid back from the cash flow engendered by the project.

What is project financing PDF?

Project finance is the process of financing a specific economic unit that the sponsors create, in which creditors share much of the venture’s business risk and funding is obtained strictly for the project itself.

What are the sources of project financing in India?

Project finance may come from a variety of sources. The main sources include equity, debt and government grants. Financing from these alternative sources have important implications on project’s overall cost, cash flow, ultimate liability and claims to project incomes and assets.

What is the role of project finance?

Project finance helps finance new investment by structuring the financing around the project’s own operating cash flow and assets, without additional sponsor guarantees. Thus the technique is able to alleviate investment risk and raise finance at a relatively low cost, to the benefit of sponsor and investor alike.

What is project financing explain with an example?

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 collateral. Project finance is especially attractive to the private sector because companies can fund major projects off-balance sheet (OBS).

What are the stages of project financing?

The process of development of a project consists of 3 stages: pre-bid stage. contract negotiation stage. fund-raising stage.

What is concept of project finance?

Project financing is a specific financial arrangement for a selected project. Project involves construction of an engineering undertaking. Repayment can be arranged in the form of installments of fixed payments over periods of time after the project is completed.

What are the two phases of project financing?

Project Financing – Financial Scheme for Long-Term Projects. The process of development of a project consists of 3 stages: pre-bid stage. contract negotiation stage.

What are the features of project finance?

The most visible characteristic of project finance is that it is non-recourse debt as to individual shareholders, including the project sponsors. Non-recourse financing means the borrowers and shareholders of the borrower have no personal liability in the event of monetary default.