Project Finance
1
Information required 2
Obligations of IIC:
1. Summary of all aspects of the project. It should include project description and location, legal status, ownership, and the background of key elements of the project structure, such as agreements, licenses, local partner participation, and financing.
2. Draft agreements (preliminary) for key elements of the project.
3. Breakdown of project costs for commissioning, interest during construction and working capital in country of origin.
4. Summary of the anticipated project financing plan; the sources of finance in the event of project cost overruns, and a description of escrow accounts. Information about the terms, security requirements, and status of financial commitments of other lenders to the project, if any, should be provided, as well as is the applicant cappable to pay in advance 15% of the export price of the capital goods and services (or that will be subject of the Advisor's assignment to arrange it).
5. Quantitative Risk Assessment must be made by the Advisor on each stage of development of the financial modeling of the project. It is of critical impor-tance to be made a risk assessment prior to start any discussions and prepa-ration fo funding an investment project.
Obligations of Oriject Company:
6. Annual financial statement covering the period to final matu- rity including balance sheet, profit and loss, source and application of funds statements, and debt service ratios. Projection should in-clude sensitivity analysis for not only the expected scenario but pessimistic and optimistic forecasts. The credit agency is to be able to review and adjust the model.
7. Assumptions for the financial projections, including, but not limited to, the basis for sales volume and prices; operating and administrative costs.
8. Market information to include: ten years of historical price and volume data; present and projected capacity of industry; product demand forecast
; descrip-tion of the market share of the project as compared to the shares of the com-petition; identity and location of customers; marketing strategy.9. Description of the principal risks and benefits of the project to the sponsors, lenders, and borrower.
NOTE. All above is for preparation of the loan application to
Export Credit Agrnces (and to EC grant chemes when the project meets with their programs).
We, IIC's financial advisors, and the project company are strictly obliged to work on
arm's-lenght""
and to escape any form of cooperation.
That means:
● The service remuneration to be paid from the loan when/if it is granted; and
● All Advisor's preliminary costs like business trips, office expenses, required taxes and public fees
to be included in admission fee and prepaid.
__________________
1)
The term
“project finance” refers to the
financing of projects that
are dependent
2)
The above information has been taken from the U.S. Federal Credit Agencies.
on the project cash flows for repayment as defined by the contractual relationships
within each project.
