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Project Finance for Business Development by John E. Triantis

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CHAPTER 12Funding Sources and ProgramsEssential Knowledge and Alliances

Most large capital infrastructure projects are not pure project finance deals; instead, they involve the participation of several funding sources and the use of various facilities and instruments. Thus, the discussion of funding‐source programs and instruments for international infrastructure projects is an introduction to pragmatic project finance. In the sections that follow, we present in summary the major funding institutions and facilities made available by official and private sources.

Multilateral and bilateral institutions play a major role in international project finance and their close relationships with governments enables them to manage difficult credit issues and coordinate financing for projects. In addition to help in project finance, funding institutions offer important nonfunding services, such as the knowledge and expertise they bring to project development and their influence on host governments to move projects forward.

The role of funding sources is to provide financing for viable projects, but in order to make funding available, they perform reasonableness checks and become drivers of processes and mobilize resources. These advantages, however, can result in extending project timelines because of the discipline introduced by their particular approval processes. Figure 12.1 gives a picture of the official funding sources that commonly participate in international project financings. ...

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