Thursday, June 17, 2010

What are the different techniques of infrastructure project financing?

Basically i know about two techniques of infrastructure project financing



1. Traditional Corporate Finance (recourse lending)



2. Project Finance (limited or non recourse lending)



but which are the others



What are the different techniques of infrastructure project financing?secured loan





Other financing types for infra projects include



BOT - build operate transfer



BOO - build own operate



What are the different techniques of infrastructure project financing?

loan



ofcourse you would need long term funding like equity and hybrids like preference shares and convertibles and debt equity of 1:3 or 1:4. It all depends on capital structuring and the Intended IRR of the project. Infrastructure projects are long term and hence much like the yield curve the risk increases as the term increases. Also debt can be held by various banks and institutions for a long period and passed on after holding it certain number of years.

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