The Case Study Store

Didn't You Used to be Project Financing

Stephen Arbogast

This case explores how energy project financing has evolved in terms of risks accepted by lenders.  Borrowers who employ project financing usually are attracted by the loan being “non-recourse” to project sponsors.  This means that the sponsors, who provide the equity financing for a venture, can expect the project loan to be repaid solely from the project’s cash flows and/or assets.  Such “fully non-recourse” loans enable sponsors to limit their financial exposure to a project; they also allow sponsors to evaluate project economics on a Return on Equity basis rather than using Return on Total Capital.

NOTICE: All Digital Downloads are NON-Printable