what-is-project-finance

ProjectFinancingChapter1WhatisProjectFinance1Chapter1WhatIsProjectFinance?InternationalProjectFinanceChapter1WhatisProjectFinance2ContentsWhatisProjectFinance?WhyisProjectFinanceneeded?ParticipantsofProjectFinance?RisksharingamongparticipantsDevelopmentofProjectFinance?InternationalProjectFinanceChapter1WhatisProjectFinance3Focusofthischapter1.ThedifferencesbetweenconventionalcompanyfinanceandProjectFinance.2.TheadvantagesanddisadvantagesofProjectFinance.3.ThefeaturesofProjectFinance.4.TheparticipantsinProjectFinanceandtheparttheyplay.5.ThekeyrisksinProjectFinance.InternationalProjectFinanceChapter1WhatisProjectFinance41.WhatisProjectFinance?InternationalProjectFinanceChapter1WhatisProjectFinance5TermsEquity股本Projectvehicle项目公司Limitedrecourse有限追索Fullrecourse完全追索Non-recourse无追索Sponsor发起人Default违约InternationalProjectFinanceChapter1WhatisProjectFinance6TermsCompletionrisk完工风险liability负债Asset资产Balancesheet资产负债表collateral抵押品Servicedebt还本付息Off-balancesheetfinancing资产负债表外融资InternationalProjectFinanceChapter1WhatisProjectFinance71.1TwowaysoffinancinglargeprojectsConventionalcompanyfinancingProjectFinanceExample:onewatercompanywantstobuildanotherwaterplantCInternationalProjectFinanceChapter1WhatisProjectFinance8ConventionalcompanyfinancingABWatercompanyCWaterplantFullrecourseBanksloanastheonlysponsorInternationalProjectFinanceChapter1WhatisProjectFinance9ProjectFinanceABWatercompanyOthersponsorsassponsorBanksloanLimitedrecourseornon-recourseProjectvehicleCInternationalProjectFinanceChapter1WhatisProjectFinance10LimitedrecourseAfullrecoursefinancingoccurswhenthesponsor(s)isresponsiblefortherepaymentoftheprojectdebt,withoutlimitation,throughtheentireloanterm.Limitedrecoursefinancingimpliesafinitecommitmentonthepartofthesponsor(s)beyondthelevelofcommittedbaseequity.完全追索指的是在项目贷款期内，发起人为项目的债务偿还负无限责任。有限追索融资是指发起人除了其承诺的基础股本外只负有限责任InternationalProjectFinanceChapter1WhatisProjectFinance11Non-recourseloanNon-recourseloanisatypeofloanwhereiftheborrowerdefaults,theissuercanseizethecollateral,butcannotseekouttheborrowerforanyfurthercompensation,evenifthecollateraldoesnotcoverthefullvalueofthedefaultedamount.Thisisoneinstancewheretheborrowerdoesnothavepersonalliabilityfortheloan.MostProjectFinanceislimitedrecoursefinancing.在无追索贷款下，如果借款人违约，贷款人可以获得其抵押物，但是不能要求借款人进一步的赔偿，即使抵押物不足以弥补全部违约金额。该情况下，借款人对贷款无需承担个人责任。InternationalProjectFinanceChapter1WhatisProjectFinance121.2DifferencesbetweentraditionalcompanyfinancingandProjectFinanceNatureofrecourseSourceoffinancingFormsofGuaranteeborrowerSourceofpaymenttraditionalcompanyfinancingFullrecoursenarrownarrowsponsorAlltheassetofsponsorProjectFinanceLimitedrecourseornon-recourseMultiplecomplexProjectvehicleassetandrevenueoftheprojectvehicleInternationalProjectFinanceChapter1WhatisProjectFinance13ProjectFinanceisthedevelopmentofanassetwherethefinancingistobeprovidedbywayofdebtorothersandistoberepaidprincipallyoutofrevenuesgeneratedbytheoperationofthatasset1.3WhatisProjectFinance?ButProjectFinanceisnotatermofartandthereareasmanydefinitionsastherearebankersInternationalProjectFinanceChapter1WhatisProjectFinance141.3WhatisProjectFinance?ProjectFinanceinvolvesacorporatesponsorinvestinginandowningasinglepurpose,industrialassetthroughalegallyindependententityfinancedwithnon-recoursedebt.Projectfinancingreferstoafinancinginwhichlenderstoaprojectlookprimarilytothecashflowandassetsofthatprojectasthesourceofpaymentoftheirloans.InternationalProjectFinanceChapter1WhatisProjectFinance15Sowecansay:TraditionalfinancingisfinancingtoaprojectwhereasProjectFinancingisfinancingthroughaproject.InternationalProjectFinanceChapter1WhatisProjectFinance162.WhyisProjectFinanceneeded?InternationalProjectFinanceChapter1WhatisProjectFinance172.1WhyProjectFinance?ProjectOwners’PerspectiveSizeandcostofprojectsRiskminimizationPreservationofborrowingcapacityandcreditratingMaybetheonlywaythatenoughfundscanberaisedInternationalProjectFinanceChapter1WhatisProjectFinance18ProjectFinanceABWatercompanyOthersponsorsassponsorBanksloanLimitedrecourseornon-recourseProjectvehicleCInternationalProjectFinanceChapter1WhatisProjectFinance19Capital-intensiveHighlyleveraged-AllowhighdebtratioManyparticipantsAllocatedriskIndependententity-SpecialpurposevehicleOff-balancesheetfinancingLongtermNon-recourseorlimitedrecoursefinancingControlleddividendpolicyCostly2.2MainCharacteristicsofProjectFinanceInternationalProjectFinanceChapter1WhatisProjectFinance202.3DisadvantagesofProjectFinanceRiskallocationiscomplex.Riskiertolendersandhigherinterestrate.Toomuchoversight（负责；照管）oftheproject.Lendersrequiremorecomprehensiveandcostlierinsurance.Documentationislengthyandcomplex.InternationalProjectFinanceChapter1WhatisProjectFinance213.MajorparticipantsInternationalProjectFinanceChapter1WhatisProjectFinance22TermsSpecialpurposevehicle特殊目的载体Corporatejointventure公司型合资结构Contractualjointventure契约型投资结构Undividedjointinterest不可分割的联合体Generalpartnership普通合伙制Limitedpartnership有限合伙制Limitedliabilitycompany（有限责任公司）Co