PROJECT FINANCE

Financing of Infrastructure Projects in Africa

SERVICES

Overview

Project Finance: Overview

Project financing is a specialised funding structure that relies on the future cash flow of a project as primary source of repayment, and holds the project’s assets, rights and interests as collateral security. It is also referred to as non- or limited recourse finance, i.e. lenders have no- or limited recourse to the sponsors or shareholders of the project company for repayment of the loan.

Project Structure
Investment Cases

Project Finance

Project Finance v Corporate Finance

Project Finance is suitable for larger projects whereas Corporate Finance is suitable for smaller projects.

Project loans have lower probabilities of default and higher recovery rates than corporate loans.

Makes Infrastructure Projects possible.

Project finance protects the corporate balance sheet.

Single asset nature makes a project’s performance transparent.

Discipline of project finance is stronger than corporate finance.

Sectors

Project Finance have been successfully implemented and is suitable for the following sectors:

Energy | Datacentres | Mining } Water | Transport | Housing | Hospitals | Telecommunications

Risk Mitigation

Vecteng Capital has structures and systems to mitigate project finance risks including the following risks:

Participants Risk | Engineering Risk | Project Management Risks | Operations Management Risks | Legal Risks | Market Risks | Funding Risks | Supply Risks