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PROJECT FINANCE
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GROUP MEMBERS
1. Hina Shaikh (1075)
2. Roohi Jaiswal (1074)
3. Suchi Khantwal (1076)4. Pragya Dhakar (1064)
5. Joel Jose (1097)
6. Priyank Sanghvi (1090)
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WHAT IS PROJECT
FINANCEProject financing is an innovative and timely financing technique thathas been used on many high-profile corporate projects.
Project Financing discipline includes understanding the rationale forproject financing, how to prepare the financial plan, assess the risks,
design the financing mix, and raise the funds.
Project finance is finance for a particular project, such as a mine,toll road, railway, pipeline, power station, ship, hospital or prison etc
In a no recourse or limited recourse project financing, the risks for afinancier are great. Since the loan can only be repaid when theproject is operational, if a major part of the project fails, the financiersare likely to lose a substantial amount of money.
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FORM OF PROJECT FINANCING
Lease financing Bank financing
Bond insurance
Stock issue
Factoring Business Debts
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STEPS IN PROJECT FINANCING
COST OF PROJECT
MEANS OF FINANCE
FINANCIAL STRUCTURE
PREPARATION OF FINANCIAL PLAN
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Federal Bank
IDBI Bank
Dena Bank
SBI Bank
Citi Bank Canara Bank
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Questionnaires
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On what basis the project finance is
given to a company?
It should be in private /public sector.
It should be technically sound.
It should have good prospects of beingprofitable.
It should be environmentally and socially
sound.
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What kinds of Project Finance do
you deal with?Kinds of Project Finance
54%
26%
15% 5%
Corporate Finance Infrastructure Finance Rural Finance Retail Finance
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What are the other sources of
financing a project?
Finance Preference by Companies
52%
30%
11%
7%
Stock Issue Lease Financing Bonds Insurance Others
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What are the time periods for which
you provide project finance?
Time Period
34%
26%
25%
15%
0 to 5 yrs 5 to 10 yrs 10 to 15 yrs 15 to 20 yrs
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What are the risks involved in
Project Finance?
POLITICAL RISK
TECHNICAL RISK
PARTICIPANT /
CREDIT RISK
MARKET/OFF
-TAKE RISK
OPERATING RISK
OPERATION
PHASE
RISK
CONSTRUCTION
PHASE RISK
RISKS
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What are the causes of Project
Failure?
Delay in Completion
Poor Management
Unstable political environment Loss of competitive position in the market
place
Technical Failure
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What factors do banks consider when
evaluating a project for financing?
Factors
Return on
Investment (ROI)
Site
accessibility
Stability of
the country
Economic &
Political
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What are the documents required
for applying for project finance?
Memorandum of Articles of Association
Audited accounts of the company
Copy of agreements Copy of letters from suppliers
Copy of Government letters for
collaboration Master plan of the project
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Which are the main lending
institutions of project finance?
EXIM Bank
Power Finance Corporation Limited
Unit Trust of India Indian Railway Finance Corporation of
India
Industrial Finance Corporation of India
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Conclusion
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Thank You