International Project Finance

International project finance | Funding global projects

According to the World Economic Forum, over $2 trillion is needed every year for the following decade for global infrastructure investment  This covers sectors in energy, water, transportation, telecommunications, mining and municipal service delivery.

This works out annually to over $400 billion for Africa, $500 billion for Asia, $500 billion for Europe, $300 billion for South/Central America, and $300 billion for North America. With such large amounts of money, two main key issues arise:

  • How will this infrastructure be financed?
  • How will opportunities make their way through the appropriate screening, risk assessment, and financial modeling analysis to determine financial viability?

If entrepreneurs find it hard to receive grants or corporate loans from the country they reside in, then they might look further afield. Overseas financial institutions provide an array of funding options such as venture capital and other private funding and so on.

Unless you go through the big banks, international project finance can be hard to come by, the biggest area of funding to date is in the technology sector.  Our funders help to fund startup businesses that require at least 70%+ project finance in multi sector environments such as infrastructure and green energy. Most “mega projects” rely on sophisticated financial modeling and financial structures. Structured finance models based on either equity, debt or a hybrid of both. Debt structured finance is more commonly used for startups as they have little to no equity and carry a lot of risk. It is more common to see private investors flock towards more established corporations with revenue on balance sheets and collateral on their assets/liabilities spreadsheet.

International Project Finance

Perceived risks in project finance can be high and this can be especially true for international endeavors. Meticulous assessment is needed to stay within the ESG (Environmental, Social and Governmental) standards and guidelines. A business that requires project finance relies on suitable loans to fit their individual needs which should be acknowledged by financiers. The guarantee for repayment of the loan is tied to the future cash flow expected to be generated exclusively from a project, even when a business is earning revenues in separate locations.

When projects are being developed in other nations (particularly emerging economies), risks become amplified because of the potential instability surrounding politics or the fear that the economy could compromise the completion of a project. Nonetheless, international project finance contributes to the expansion of economies in developing countries. The financial institutions that become involved in international project finance are taking on risk, with the only collateral being the assets used in the project itself.

Bank Instruments For International Trade

One of the biggest issues any business has when trading on a global scale is the issue of financial security. The business needs some comfort knowing that that the Buyer will pay for goods received and on time. Using a bank instrument is one example of how you can secure payment should the Buyer not pay on time or at all. Bank instruments can be hard to come by, in fact there are around 15 genuine Providers of “fresh cut instruments“.

Bank Instrument Providers

There are many reasons why people choose to lease a bank instrument from a credible source. Reasons might include

  • To fund a project
  • Provide security for international trade
  • To use other sources of collateral at a fraction of the overall cost
  • To use bank instruments to grow and expand a company

Bank instrument Providers can be large organisations such as hedge funds and pension funds and often work to tight timelines. It is impossible to contact these organisations directly so knowing their trusted sources will open many doors for you. For more factual information about bank instrument Providers, follow us on G+

Please note; Prestige Capital Partners are connected to providers of fresh cut bank instruments.

The Difference Between Fresh Cut and Seasoned Instruments

Fresh Cut only means that it has been freshly issued, “seasoned instrument” means that it was issued in the past and is in the secondary market. People buy fresh cut instruments as the bank instrument comes from a direct credible source thus knowing exactly the person/organisation who cut the instrument for lease. Usually bank instruments such as SBLC’s are time limited and should be paid back in full to the Provider within the time specified.

Project Finance Terms

Typically, the duration for project finance is long-term in nature. The process involves forecasting what the anticipated cash flow from a project will be, and extending debt and equity financing based on those projections. Funding international projects might be extended by bilaterally and multilaterally using a mixture of financial institutions and global investment banks. These institutions have an interest in profit sharing of a growing economy’s expansion efforts. It might also derive from a specialty-financing firm that focuses exclusively on supporting international endeavors.

We can source the arrangement for specific project finance (debt or/and equity funding). Our funders offer can offer flexibility through recourse loans that are collateralized by a project’s assets and cash flows. This could finance as much as 99% of the project’s total cost over a term of five to 15 years.

Supported Countries

We are mandated to source funding for many worldwide projects (see map below). We realize that there are financiers who have specific geographical locations where they fund. If the project is on the embargo list, we are unable to source finance.

European Project Finance  | North America | South America | Africa | Asia | Australasia |

Funding Businesses Worldwide

We deal with global funders who have different appetites for different geographies and industry sectors. If you need help with business growth and expansion, we are able to collateralise and monetize stocks, real estate and gemstone portfolios.

Project Funding Mandates

This map shows the locations of our registered office and operations (in red) global mega projects that we have been mandated to find funding for (in yellow) If you want to know the funding deals done, you can ask our funders once we have established funding capability. (You may have to request this from their lawyer)

If you hold collateral such as bonds and other bank instruments and want to help fund projects, see our investors page. These instruments should appear in clearing houses such as EuroClear. If you are looking to get your bank instrument monetised or issued, Prestige Capital Partners can assist.

International Project Finance was last modified: September 5th, 2017 by Denise