Principles of Project Finance

structures may just add to the time and cost of putting the deal together, or be too

rigid if something goes wrong, or add extra risks that cannot be foreseen at the be-

ginning. The financial structure should therefore be kept as simple as possible; for

example, several different sources of debt should not be used if sufficient finance

can be raised from one source, as it is far quicker and easier to deal with one group

of lenders (e.g. avoiding intercreditor problems). As far as possible, financing

should also be kept sufficiently flexible to accommodate changes in the project

over time.

It is also easy for both Sponsors and lenders to get so carried away by the detail

of structuring and negotiating the deal that the big picture of what really matters ...