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PROJECT FINANCE

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GROUP MEMBERS

1. Hina Shaikh (1075)

2. Roohi Jaiswal (1074)

3. Suchi Khantwal (1076)4. Pragya Dhakar (1064)

5. Joel Jose (1097)

6. Priyank Sanghvi (1090)

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WHAT IS PROJECT

FINANCEProject financing is an innovative and timely financing technique thathas been used on many high-profile corporate projects.

Project Financing discipline includes understanding the rationale forproject financing, how to prepare the financial plan, assess the risks,

design the financing mix, and raise the funds.

Project finance is finance for a particular project, such as a mine,toll road, railway, pipeline, power station, ship, hospital or prison etc

In a no recourse or limited recourse project financing, the risks for afinancier are great. Since the loan can only be repaid when theproject is operational, if a major part of the project fails, the financiersare likely to lose a substantial amount of money.

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FORM OF PROJECT FINANCING

Lease financing Bank financing

Bond insurance

Stock issue

Factoring Business Debts

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STEPS IN PROJECT FINANCING

COST OF PROJECT

MEANS OF FINANCE

FINANCIAL STRUCTURE

PREPARATION OF FINANCIAL PLAN

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Federal Bank

IDBI Bank

Dena Bank

SBI Bank

Citi Bank Canara Bank

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Questionnaires

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On what basis the project finance is

given to a company?

It should be in private /public sector.

It should be technically sound.

It should have good prospects of beingprofitable.

It should be environmentally and socially

sound.

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What kinds of Project Finance do

you deal with?Kinds of Project Finance

54%

26%

15% 5%

Corporate Finance Infrastructure Finance Rural Finance Retail Finance

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What are the other sources of

financing a project?

Finance Preference by Companies

52%

30%

11%

7%

Stock Issue Lease Financing Bonds Insurance Others

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What are the time periods for which

you provide project finance?

Time Period

34%

26%

25%

15%

0 to 5 yrs 5 to 10 yrs 10 to 15 yrs 15 to 20 yrs

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What are the risks involved in

Project Finance?

POLITICAL RISK

TECHNICAL RISK

PARTICIPANT /

CREDIT RISK

MARKET/OFF

-TAKE RISK

OPERATING RISK

OPERATION

PHASE

RISK

CONSTRUCTION

PHASE RISK

RISKS

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What are the causes of Project

Failure?

Delay in Completion

Poor Management

Unstable political environment Loss of competitive position in the market

place

Technical Failure

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What factors do banks consider when

evaluating a project for financing?

Factors

Return on

Investment (ROI)

Site

accessibility

Stability of

the country

Economic &

Political

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What are the documents required

for applying for project finance?

Memorandum of Articles of Association

Audited accounts of the company

Copy of agreements Copy of letters from suppliers

Copy of Government letters for

collaboration Master plan of the project

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Which are the main lending

institutions of project finance?

EXIM Bank

Power Finance Corporation Limited

Unit Trust of India Indian Railway Finance Corporation of

India

Industrial Finance Corporation of India

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Conclusion

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Thank You