Project Loan

About Project Loan

Project Loan

How does a project loan work?

The debt and equity used to finance the project are paid back from the cash flow generated by the project. Project financing is a loan structure that relies primarily on the project's cash flow for repayment, with the project's assets, rights, and interests held as secondary collateral.

There are three methods in Project Financing:

Cost Share Financing or Low interest loan financing.
Debts Financing.
Equity Financing.

What is a project loan agreement?

A loan agreement is made between the project company (borrower) and the lenders. Loan agreement governs relationship between the lenders and the borrowers. It determines the basis on which the loan can be drawn and repaid, and contains the usual provisions found in a corporate loan agreement.

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