Principles of Project Finance

This chapter examines some of the main financial structuring issues likely to

arise once the commercial fundamentals and risks of the project, and the cash flow

that results from these, have been reviewed as set out in previous chapters.

The main elements in the financing negotiations between the Project Company

and its lenders are likely to include:

• The debt:equity ratio (cf. §13.1)

• The term (length) of the debt and its repayment schedule (cf. §13.2)

• The drawdown schedule for debt and equity (cf. §13.3)

• The interest rate and fees to be charged by lenders (cf. §13.4)

• Lenders’ control of the Project Company’s cash flow (cf. §13.5)

• Provisions for ...