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The term "project
finance" is used to refer to a non-recourse or limited recourse
financing structure in which debt, equity, and credit enhancement
are combined for the construction and operation, or the refinancing,
of a particular facility in a capital-intensive industry, in which
lenders base credit appraisals on the projected revenues from the
operation of the facility, rather than the general assets or the credit
of the sponsor of the facility, and rely on the assets of the facility,
including any revenue - producing contracts and other cash flow generated
by the facility, as collateral for the debt. In a project financing,
therefore, the debt terms are not based on the sponsor's credit support
or on the value of the physical assets of the project. Instead, the
project performance, both technical and economic, is the nucleus of
the project finance.
PGI assists clients in obtaining medium
and long-term financing on a project-finance basis. PGI appraises
the cash flows generated by a specific project for repayment of
the loan, carefully analyses the economic, technical, marketing,
and financial soundness of the project to determine its creditworthiness.
There must be an adequate cash flow to pay all operational costs
to service all debt, and to provide the owners or sponsors with
an adequate return on their investment.
When PGI Funds Consultancy is convinced
on the soundness and creditworthiness of a specific project, it
submits a proposal to the most appropriate international investors
and lenders, who designated PGI as their representatives.
If a proposal is appraised as viable by such financiers, PGI
brings together the client and the financier, and assists both parties
for the realisation of the proposal and execution of a financing
contract.
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