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FAQs on Project Financing in India

FAQs on Project Financing in India

1. What is project finance and how does it work?

Project Finance involves long-term financing for industrial and infrastructure projects, as well as public services, using a limited recourse financial structure. In India, project finance caters to the funding needs of specific projects. It ensures that the project is considered secure once it is completed, and the generated revenue is utilized to repay the loan. Repayment in project financing depends on the project’s cash flow, while the project’s assets, rights, and interests serve as secondary collateral.

2. What are the characteristics of Project Finance?

3. What is the importance of Project Financing?

In the past few years, global interest in Project Financing as a tool for economic investment has increased. Project finance helps finance new investments. It is structuring the finance around the project’s cash flow and assets. Generally without any additional sponsor guarantees.  It also alleviates investment risk and raises finance at a relatively lower cost.  Thus, benefiting the sponsor and investor. 

For a detailed discussion on Project funding for Indian Enterprises click here.

4. How do you get Project Finance in India?

Step 1) Pre-Financing 

Step 2) Financing 

Step 3) Post-Financing

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