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.
Our international funders provide finance 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.
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.
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 |
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 hold collateral such as bonds and other bank instruments to help fund projects, see our investor page. These instruments should appear in clearing houses such as EuroClear. Please see our Collateral Assignment for details.