Sberbank CIB
The Corporate and Investment Banking Business of Sberbank

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