Project Financing and Complex Sructured Transactions

Project financing is financing of investment projects which allows servicing debts through project cash flow and distributing risks between participants.

Project financing is a kind of complex structured deals participated by several investors and parties of financing.

Key sectors in focus:

  • metals and mining
  • chemical sector
  • oil refining industry
  • electric-power industry
  • pulp and paper industry
  • infrastructure industry

We suggest our clients officially recognized unique experience in project financing:

III place among MLA, EMEA (PFI Financial League Tables 1H 2016)

Deal of the year 2011 (PFI)

Your goal:

  • to implement large capital-intensive investment project attracting extra shareholders or investors
  • to decrease credit burden on the corporate balance
  • to structure (to decrease and to rebalance) project risks

Our suggestion:

project financing*

Project financing and motivation of the parties 
Project financing enables:

Shareholders/ sponsors

  • to decrease burden on corporate balance at the operational phase (limited recourse financing or nonrecourse financing);
  • to maximize the length and amount of financing as well as to diversify sources of financing;
  • to decrease financing cost at the operational phase;

Financial investors:

  • to have excess return by sharing project risks with strong shareholders or sponsors.

Loan holders:

  • to have acceptable risk portfolio (the deal quality can be higher than initiators’ corporate risk because of structuring) as well as to support strategic clients.
Project financing: Q&A 
  • Who – project company (initiator) is a joint venture launched (as a rule) by sector participants (shareholders, sponsors) and financial participants (investors);
  • Where – the project is realized in the key sectors;
  • When – works on financing start at the early stage along with taking investment decision by shareholders / sponsors and beginning of the project works.
Credit ratios  
  1. 1. (D/E ratio);
  2. 2. DSCR and LLCR: minimum values depend of project sector.
Project financing arrangement. Stages.  
  1. 1. "Proper examining of the project". Project vetting by in-house and out-house experts;
  2. 2. "Market entry". Preparing financing package and entering to the financing market (approaching to potential loan holders);
  3. 3. Negotiations and deal paperwork. Making up loan holders pool, finalizing paperwork and signing financial papers;
  4. 4. Financial closure. Providing financing (loans and other products) and realization of the project.
Results of project financing deal  
  • shareholders and sponsors attract financing on attractive conditions;
  • loan holders have a quality borrower;
  • region or budget have new jobs and extra tax proceeds.

Project financing of complex structured transaction. Operational scheme:

*Banking products and services are provided by Sberbank.
 General license for banking operations issued on the 11th August, 2015. Registration No. 1481