SlideShare a Scribd company logo
4
Most read
6
Most read
9
Most read
FINANCING PROJECT
THROUGH STRUCTURED
FINANCE
PROJECT FINANCING
PARTIES INVOLVE, STEPS & IMPORTANCE
INTRODUCTION
01
STRUCTURED FINANCE- FEATURES, PRODUCT ROLES
STRUCTURED
02
THE“SECRETS” TO
SUCCESSFUL FINANCING
03
CONCLUSION
04
Agenda
The financing of long- term infrastructure,
industrial projects and public services.
Project financing is loan structure
Attractive to the private sector
PROJECT FINANCING
Project financing is a long term financing of
infrastructure and industrial project based upon the
projected cash flow of the project rather than the
balance sheet of the project.
INTRODUCTION
LENDERS
SUPPLIERS &
CONTRACTORS
GOVERNMENT
SPONSORS &
INVESTORS
Project company need to obtain
a concession from the host
government.
Role or type of contract: Build
own operate or Build transfer .
Role of turnkey contract to make
sure that construction is complete
within cost and on schedule turnkey
contract specify a fixed price and
penalties for delay
They are generally involved in the
construction and the
management of the project.
Other equity holders may be
companies with the commercial
ties to the project, , customer or
supplier
.
The needed finance is generally
raised in the form of debt from a
Syndicate of lender such as bank
and less frequently from the bond
market
CUSTOMERS
Depending on the contract
customers multiple or a
single customer
WHY USE PROJECT FINANCE
 Amount is too
large for company
balance sheet
 Obtain a better
tax treatment for
the benefit of the
project
 Avoid any
negative impact of
a project on the
credit standing of
the sponsors
 Too much risk, so
reduce the risk and
maximize the
leverage of a
project
 Obtain the better
financial conditions,
when the credit risk
of the project is
better than the
credit standing of
the sponsors
 Avoiding any
restrictions under
there respective
financial
obligations
Steps Towards Project Financing
Step 4: The sponsored company assembles financing for the project and arrange
the off take agreement pre-determined agreement with the buyer to purchase
some amount of goods or a service produced
Steps 3 The sponsored company
established and entities that will conduct
the project the special purpose vehicle (SPV)
Step 1: Host government tenders a project procurement process and
award the project to a sponsor company the sponsor company and the
host government sign a concession agreement.
Step 2 :The sponsor company essays of project viability technical
legal environmental accept some time this is the first step before a
sponsor company bids on a project
Steps 5: The sponsoring company walk out agreement with
the contract and subcontractors equipments providers etc
Step 6: The sponsoring
company will overseas
construction and upon completion will
either hand bag the project to the host
country operate the site itself transfer
operation to another private entity
STRUCTURED
F I N A N C E
The term “structured finance” is often
used to explain the bundling of
receivables, although it is more generally
applicable to the offering of a structured
system to help borrowers – and lenders –
accomplish their end goal.
The primary goal is to facilitate financing
solutions that don’t involve free cash flow
and to address different asset classes
across various industries, making less
risky products available to clients that
need them.
DEFINITION
FEATURES
Structured financial products, such as
collateralized debt obligations, are non-
transferable.
Structured finance is being used to manage
risk and develop financial markets for complex
emerging markets.
Basically provide the best financial solution for
your project needs and services include:
Finance working capital .
Finance long-term debt for strategic
capital investment
Due diligence and feasibility assessment.
Assets and risk management
STRUCTURE
FINANCE
Several structured finance products
and combinations of products can be
used to accomplish the financing
needs of large borrowers.
Structured finance products include:
Syndicated loans
Collateralized bond obligations (CBOs)
Credit default swaps (CDSs)
Hybrid securities
Collateralized mortgage obligations
Collateralized debt obligations (CDOs)
A syndicated loan, also known as a
syndicated bank facility, is financing offered
by a group of lenders—referred to as a
syndicate—who work together to provide
funds for a single borrower, for example; a
transportation project, such as a high speed
rail, may involve a group of investors and
lenders.
A collateralized bond obligation
(CBO) is a structured product that
pools several junk bonds in order to
create an investment grade
security.
A junk bond is debt that has been
given a low credit rating by a
ratings agency, below investment
grade. As a result, these bonds are
riskier since chances that the
issuer will default or experience a
credit event are higher
A credit default swap is a
financial swap agreement that
the seller of the CDS will
compensate the buyer in the
event of a debt default or other
credit event. That is, the seller of
the CDS insures the buyer
against some reference asset
defaulting.
A hybrid security is a single
financial security that combines
two or more different financial
instruments. Hybrid securities,
often referred to as "hybrids,"
generally combine both debt
and equity characteristics.
A collateralized mortgage obligation
(CMO) is a type of complex debt
security that repackages and directs the
payments of principal and interest from
a collateral pool to different types and
maturities of securities, thereby meeting
investor needs.
A collateralized debt obligation (CDO)
is a complex structured finance product
that is backed by a pool of loans and
other assets and sold to institutional
investors. A CDO is a particular type of
derivative because, as its name implies,
its value is derived from another
underlying asset.
 Choosing the right source of capital is a decision that will influence of project for a
lifetime
 The money is out there the key is knowing where to look.
 Raising a money take time and efforts.
 Creativity count and entrepreneurs have to be as creative in their search for capital.
 Be thoroughly prepared before approaching lenders & investors.
THE “SECRETS” TO SUCCESSFUL FINANCING
 Project financing involves raising funds on a limited-recourse or
nonrecourse.
 Structured finance and its products are important it provide the scope
holding and a space for Major borrowers needing a capital injection for
alternative source of Financing when other more traditional boring option
won't work
 The choice of legal structure can have important tax implications. It can
also affect the availability of funds to a project and the cost of raising
project financing.
 How is there the borrowers in the market with the unique requirements
with Universe comes a unique financing instrument is structured finance
refers to an instrument which helps them pain risk when applied to
securitization of various assets
 The aim is to create a situation in order to provide a non flow financing
solution and a structured risk mitigation product for client when looking at the
number of industries and classes of assets
CONCLUSION
THANK YOU

More Related Content

PPTX
Securitization
PPT
Securitisation
PPTX
Forfaiting
DOCX
Investment banks
PPTX
Financial markets
PPT
investment banking.ppt
PDF
Lehman Intro Investment Banking
PPTX
Loans and advances
Securitization
Securitisation
Forfaiting
Investment banks
Financial markets
investment banking.ppt
Lehman Intro Investment Banking
Loans and advances

What's hot (20)

DOCX
Securitisation in india
PPTX
Types of international bonds
PPTX
Presentation on securitization
PPTX
Debt market
PPT
Introduction to Financial System
PPTX
Collateral security
PDF
Cash credit presnetation
PPT
Asset securitization
PPT
Chapter 24_Risk Management in Financial Institutions
PPTX
Banker and customer relationship
PPTX
Credit risk
PPTX
Foreign Direct Investment & Cross Border Acquisitions
PPTX
Basics on Bonds
PPT
Commercial bank management
PPTX
Intro to Credit Rating Agencies
PPTX
CREDIT RATING METHODOLOGY
PPTX
Mutual funds basics ppt
DOCX
Currency derivatives
PPTX
Securitisation
Securitisation in india
Types of international bonds
Presentation on securitization
Debt market
Introduction to Financial System
Collateral security
Cash credit presnetation
Asset securitization
Chapter 24_Risk Management in Financial Institutions
Banker and customer relationship
Credit risk
Foreign Direct Investment & Cross Border Acquisitions
Basics on Bonds
Commercial bank management
Intro to Credit Rating Agencies
CREDIT RATING METHODOLOGY
Mutual funds basics ppt
Currency derivatives
Securitisation
Ad

Similar to Financing Project Through Structured Finance (20)

PPTX
THE CONCEPT OF PROJECT FINANCING-3(1) (1).pptx
DOC
Securitization
PPT
Project Financing
PPT
Project financing
PPTX
Project Financing & Management.pptxnnnhjftuj
PDF
Project Finance
PPTX
Means of finance
PPTX
Project management chapter 7
PPT
Securitization.ppt
DOCX
Wind project cost & financing
PPT
Project finance emu
DOCX
Pm0010 introduction to project management
DOCX
Pm0010 introduction to project management
PPTX
Managing the finance function
PPSX
Steps to Issuing a Municipal Bond:
DOC
Project finance
DOC
Venture capital 1
PPTX
Types of sponsors and investors in project finance
PPTX
Unlocking Capital for High-Impact PPP Ventures
PPTX
Banking finance
THE CONCEPT OF PROJECT FINANCING-3(1) (1).pptx
Securitization
Project Financing
Project financing
Project Financing & Management.pptxnnnhjftuj
Project Finance
Means of finance
Project management chapter 7
Securitization.ppt
Wind project cost & financing
Project finance emu
Pm0010 introduction to project management
Pm0010 introduction to project management
Managing the finance function
Steps to Issuing a Municipal Bond:
Project finance
Venture capital 1
Types of sponsors and investors in project finance
Unlocking Capital for High-Impact PPP Ventures
Banking finance
Ad

Recently uploaded (20)

PDF
final_dropping_the_baton_-_how_america_is_failing_to_use_russia_sanctions_and...
PDF
Bitcoin Layer August 2025: Power Laws of Bitcoin: The Core and Bubbles
DOCX
marketing plan Elkhabiry............docx
PPTX
The discussion on the Economic in transportation .pptx
PPTX
Antihypertensive_Drugs_Presentation_Poonam_Painkra.pptx
PDF
Circular Flow of Income by Dr. S. Malini
PDF
ssrn-3708.kefbkjbeakjfiuheioufh ioehoih134.pdf
PPTX
social-studies-subject-for-high-school-globalization.pptx
PPT
E commerce busin and some important issues
PDF
Topic Globalisation and Lifelines of National Economy.pdf
PDF
NAPF_RESPONSE_TO_THE_PENSIONS_COMMISSION_8 _2_.pdf
PPTX
4.5.1 Financial Governance_Appropriation & Finance.pptx
PDF
1a In Search of the Numbers ssrn 1488130 Oct 2009.pdf
PDF
Q2 2025 :Lundin Gold Conference Call Presentation_Final.pdf
PDF
Why Ignoring Passive Income for Retirees Could Cost You Big.pdf
PDF
discourse-2025-02-building-a-trillion-dollar-dream.pdf
PDF
caregiving tools.pdf...........................
PPTX
Introduction to Customs (June 2025) v1.pptx
PDF
ABriefOverviewComparisonUCP600_ISP8_URDG_758.pdf
PDF
Dr Tran Quoc Bao the first Vietnamese speaker at GITEX DigiHealth Conference ...
final_dropping_the_baton_-_how_america_is_failing_to_use_russia_sanctions_and...
Bitcoin Layer August 2025: Power Laws of Bitcoin: The Core and Bubbles
marketing plan Elkhabiry............docx
The discussion on the Economic in transportation .pptx
Antihypertensive_Drugs_Presentation_Poonam_Painkra.pptx
Circular Flow of Income by Dr. S. Malini
ssrn-3708.kefbkjbeakjfiuheioufh ioehoih134.pdf
social-studies-subject-for-high-school-globalization.pptx
E commerce busin and some important issues
Topic Globalisation and Lifelines of National Economy.pdf
NAPF_RESPONSE_TO_THE_PENSIONS_COMMISSION_8 _2_.pdf
4.5.1 Financial Governance_Appropriation & Finance.pptx
1a In Search of the Numbers ssrn 1488130 Oct 2009.pdf
Q2 2025 :Lundin Gold Conference Call Presentation_Final.pdf
Why Ignoring Passive Income for Retirees Could Cost You Big.pdf
discourse-2025-02-building-a-trillion-dollar-dream.pdf
caregiving tools.pdf...........................
Introduction to Customs (June 2025) v1.pptx
ABriefOverviewComparisonUCP600_ISP8_URDG_758.pdf
Dr Tran Quoc Bao the first Vietnamese speaker at GITEX DigiHealth Conference ...

Financing Project Through Structured Finance

  • 2. PROJECT FINANCING PARTIES INVOLVE, STEPS & IMPORTANCE INTRODUCTION 01 STRUCTURED FINANCE- FEATURES, PRODUCT ROLES STRUCTURED 02 THE“SECRETS” TO SUCCESSFUL FINANCING 03 CONCLUSION 04 Agenda
  • 3. The financing of long- term infrastructure, industrial projects and public services. Project financing is loan structure Attractive to the private sector PROJECT FINANCING Project financing is a long term financing of infrastructure and industrial project based upon the projected cash flow of the project rather than the balance sheet of the project. INTRODUCTION
  • 4. LENDERS SUPPLIERS & CONTRACTORS GOVERNMENT SPONSORS & INVESTORS Project company need to obtain a concession from the host government. Role or type of contract: Build own operate or Build transfer . Role of turnkey contract to make sure that construction is complete within cost and on schedule turnkey contract specify a fixed price and penalties for delay They are generally involved in the construction and the management of the project. Other equity holders may be companies with the commercial ties to the project, , customer or supplier . The needed finance is generally raised in the form of debt from a Syndicate of lender such as bank and less frequently from the bond market CUSTOMERS Depending on the contract customers multiple or a single customer
  • 5. WHY USE PROJECT FINANCE  Amount is too large for company balance sheet  Obtain a better tax treatment for the benefit of the project  Avoid any negative impact of a project on the credit standing of the sponsors  Too much risk, so reduce the risk and maximize the leverage of a project  Obtain the better financial conditions, when the credit risk of the project is better than the credit standing of the sponsors  Avoiding any restrictions under there respective financial obligations
  • 6. Steps Towards Project Financing Step 4: The sponsored company assembles financing for the project and arrange the off take agreement pre-determined agreement with the buyer to purchase some amount of goods or a service produced Steps 3 The sponsored company established and entities that will conduct the project the special purpose vehicle (SPV) Step 1: Host government tenders a project procurement process and award the project to a sponsor company the sponsor company and the host government sign a concession agreement. Step 2 :The sponsor company essays of project viability technical legal environmental accept some time this is the first step before a sponsor company bids on a project Steps 5: The sponsoring company walk out agreement with the contract and subcontractors equipments providers etc Step 6: The sponsoring company will overseas construction and upon completion will either hand bag the project to the host country operate the site itself transfer operation to another private entity
  • 8. The term “structured finance” is often used to explain the bundling of receivables, although it is more generally applicable to the offering of a structured system to help borrowers – and lenders – accomplish their end goal. The primary goal is to facilitate financing solutions that don’t involve free cash flow and to address different asset classes across various industries, making less risky products available to clients that need them. DEFINITION
  • 9. FEATURES Structured financial products, such as collateralized debt obligations, are non- transferable. Structured finance is being used to manage risk and develop financial markets for complex emerging markets. Basically provide the best financial solution for your project needs and services include: Finance working capital . Finance long-term debt for strategic capital investment Due diligence and feasibility assessment. Assets and risk management STRUCTURE FINANCE
  • 10. Several structured finance products and combinations of products can be used to accomplish the financing needs of large borrowers. Structured finance products include: Syndicated loans Collateralized bond obligations (CBOs) Credit default swaps (CDSs) Hybrid securities Collateralized mortgage obligations Collateralized debt obligations (CDOs)
  • 11. A syndicated loan, also known as a syndicated bank facility, is financing offered by a group of lenders—referred to as a syndicate—who work together to provide funds for a single borrower, for example; a transportation project, such as a high speed rail, may involve a group of investors and lenders.
  • 12. A collateralized bond obligation (CBO) is a structured product that pools several junk bonds in order to create an investment grade security. A junk bond is debt that has been given a low credit rating by a ratings agency, below investment grade. As a result, these bonds are riskier since chances that the issuer will default or experience a credit event are higher
  • 13. A credit default swap is a financial swap agreement that the seller of the CDS will compensate the buyer in the event of a debt default or other credit event. That is, the seller of the CDS insures the buyer against some reference asset defaulting.
  • 14. A hybrid security is a single financial security that combines two or more different financial instruments. Hybrid securities, often referred to as "hybrids," generally combine both debt and equity characteristics.
  • 15. A collateralized mortgage obligation (CMO) is a type of complex debt security that repackages and directs the payments of principal and interest from a collateral pool to different types and maturities of securities, thereby meeting investor needs.
  • 16. A collateralized debt obligation (CDO) is a complex structured finance product that is backed by a pool of loans and other assets and sold to institutional investors. A CDO is a particular type of derivative because, as its name implies, its value is derived from another underlying asset.
  • 17.  Choosing the right source of capital is a decision that will influence of project for a lifetime  The money is out there the key is knowing where to look.  Raising a money take time and efforts.  Creativity count and entrepreneurs have to be as creative in their search for capital.  Be thoroughly prepared before approaching lenders & investors. THE “SECRETS” TO SUCCESSFUL FINANCING
  • 18.  Project financing involves raising funds on a limited-recourse or nonrecourse.  Structured finance and its products are important it provide the scope holding and a space for Major borrowers needing a capital injection for alternative source of Financing when other more traditional boring option won't work  The choice of legal structure can have important tax implications. It can also affect the availability of funds to a project and the cost of raising project financing.  How is there the borrowers in the market with the unique requirements with Universe comes a unique financing instrument is structured finance refers to an instrument which helps them pain risk when applied to securitization of various assets  The aim is to create a situation in order to provide a non flow financing solution and a structured risk mitigation product for client when looking at the number of industries and classes of assets CONCLUSION