What are the Latest trends of Project Finance?

Project finance relies primarily on the cash flows generated by the project serve as the source of loan repayment with the project's assets serves as a pledge for a non-recourse loan. It is the long-term infrastructure and the main characteristic is its non-recourse or limited recourse structure.

Financing involves the debt, contingent equity, and a variety of limited guarantees through a newly organized company for the purpose of building a capital intensive facility. Project finance is not appropriate for small projects. While it is more expensive and it enables sponsors to finance projects off-balance sheet that makes the form of finance attractive for joint ventures, PPPs, infrastructure projects or other projects where a sponsor wishes to buckler its other assets from the risk of a project failure.

Latest trends of project finance

The significant development has seen in the last financial year in the sectors such as city gas distribution projects, aviation, and renewable energy, India has also witnessed a consolidation of sorts and an increased focus in resolving assets. The RBI, by its circular dated 12 February 2018 has completely refurbished the regulatory framework for the resolution of stressed assets. It supplants all existing restructuring frameworks including resolution under the joint lenders’ forum and strategic debt restructuring and provides for a unified framework for restructuring of stressed assets.

India has also cleared faster adoption and manufacturing of electric vehicles, to increase the push for electric vehicles and energy storage systems in India. there has also been a focus on making infrastructure projects more bankable with the modification being made in standard form concession agreements to make infrastructure projects more appealing to developers. The roads and transportation sector has also seen the introduction of the toll-operate-transfer model.