Project Finance

Project finance refers to foreign bank financing through export credit to a buyer of a new economic entity (special purpose vehicle/company) with a view to implementing an investment project under the cover of the ECA of the vendor/general contractor host country.

The principal areas of project finance application are as follows: energy, mining and mineral processing, metallurgy, construction materials, telecommunications, oil refining, infrastructure, etc.

The special feature of project finance is that the only source of loan debt amortization is the income of the newly established economic unit, thus, its assets is the only provision of payments. This type of financing has a longer term of credit (up to 14 years) and long repayment holiday (up to 2 years).

Project Documentation

The financing bank as well as the respective ECA should be provided with the required documents for the estimation of the financial attractiveness of the project (read more).

Structured Finance

Structured finance refers to foreign bank financing of new activities of the borrower, a significant increase or upgrading of existing facilities through export credit on security of the ECA of the supplier/general contractor host country.

This kind of financing is often referred to as project financing due to attracting finance for a new project of the borrower.

The principal areas of trade finance application are as follows: energy, wood processing, agriculture, construction, engineering, metallurgy, telecommunications, etc.

Structured finance has several features and is applied in cases where the financial situation of the borrower is not correlated with the scale of the project on the substantial expansion of business or production. Individual structure of the transaction, elaborated under the terms of each specific project, enables the financing.

Basic requirements for the implementation of structured financing:

• relevant analysis of the SPV (special purpose vehicle) and of the existing business;
• the borrower’s financial situation is generally acceptable (but not correlated with the scale of the project to be implemented);
• economically viable project;
• comprehensive  support.

Project Documentation

The financing bank as well as the respective ECA should be provided with the required documents for estimating the creditworthiness of the company and financial attractiveness of the project (read more).