The Project-Finance Markets
Private-sector project-finance debt has traditionally been mainly provided from two sources—commercial banks (§4.2) and bonds (§4.3). Commercial banks provide long-term loans to Project Companies; bondholders (typically life-insurance companies and pension funds, which need long-term cash flows) purchase long-term bonds (tradable debt instruments) issued by Project Companies. Recently these non-bank lenders have also begun to make direct loans to projects, and participate in debt funds (§4.4). Other types of private-sector finance are sometimes also used in projects (§4.5). Although the financial and legal structures and procedures are different, the criteria under which debt is raised in each of these markets ...
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