Project Finance

Project finance: funding a project on its own cash flows

Project finance is long-term funding for a specific capital project – a new plant, an infrastructure asset or a major expansion. Lenders rely mainly on the cash flows the project will generate, rather than only on the sponsor’s balance sheet. The project is often housed in a separate company (a special purpose vehicle), and the lenders take security over its assets and contracts.

Early Grow helps promoters prepare the project report and financial model, structure the debt and present the proposal to suitable lenders.

How it differs from an ordinary business loan

• Basis of lending – projected project cash flows and contracts, not just historical financials.
• Structure – often a separate project company, with limited recourse to the sponsors after completion.
• Tenure – longer, with a moratorium during construction and repayment matched to project cash flows.
• Due diligence – technical, legal, financial and market studies, often by independent experts.

Who is it for?

Companies and promoters planning capital-intensive projects, such as manufacturing plants, warehousing, hospitals, hospitality, renewable energy or infrastructure. The promoter must be able to bring their own equity and must have the required approvals.

Documents usually required

• A detailed project report (DPR) and feasibility study.
• A financial model with projections and sensitivity analysis.
• Sponsor financials, and constitution documents of the project company.
• Approvals, land documents and key contracts, such as engineering, procurement and construction (EPC), supply or offtake agreements.
• Details of the promoter’s contribution and other means of finance.

How Early Grow helps

1. We assess the project and the funding needed.
2. We help prepare the DPR and financial model, or review your existing ones.
3. We propose a debt structure: amount, moratorium, tenure and security.
4. We approach suitable lenders, coordinate due diligence and help negotiate the term sheet. The lender makes the credit decision.