In the project funding, the capital can be raised for any type of project. This was just one of the vital features of project funding. It involves investor’s funds and the financed loans which are to be repaid once the cash flow marks its way.

It is non-recourse

In project financing, the borrower is not liable to obligations in the cases of default. It is a type of mortgage that banks take while financing the project when discrepancies like the borrower being unable to make the partial or complete repayment of the loan. Banks, financial institutions, and lending firms use that mortgage to recover the loan amount. Their recovery will be identical to the mortgage value, and cannot exceed it.

Multiple participants as lenders/investors

As this loan is taken for long term, big scaled projects, there is a participation of multiple entities which ensure the process is collectively smooth, and fast.

SPV overview

The SPV (Special Purpose Vehicle) keeps an eye on the proceedings of the project and also maintains a line of sight at the assets. After the completion of the project, asset allocation is processed with regards to the Special Purpose Vehicle which monitors all of that.

Revenue from the completed project for repayment

The cash flow which the project generates after completion is therefore used for the repayment of the loan. A credit rating of the sponsor has minimal impact on project funding