Principles of Project Finance

for a variety of reasons there can often be a considerable time lag between

the signing of loan documentation and hence underwriting, and syndication

to other participating banks in the project finance market.

• The proportion of the fee that has to be reallowed to subunderwriting or par-

ticipating banks to induce them to join the syndication (which is itself a func-

tion of the time the participating bank spends reviewing it, the overall return

the market requires for the risk, taking interest margin and fees together into

account, and perhaps competition from other transactions in the market at the

same time)

Roughly speaking, the overall level of fees may vary between 1–2% of the loan

amount with the level of arranging and underwriting fee at about ...