Project financing is a kind of financing where banks or financial institutions fund long term infrastructure or industrial projects
Project financing is a kind of financing where banks or financial institutions fund long term infrastructure or industrial projects. Project financing is a loan structure that relies primarily on the project’s cash flow for repayment, with the projects assets, rights and interest held as secondary securities or collateral.
This kind of financing arrangement belongs to the secured loan category where borrower gives a guarantee by using his property as security. Bank usually finance 40 to 60% of mortgage value.
It is easy to get loan in this category as banks prefer to finance against mortgage of property due to less risk.
This kind of financing is attractive for private sector as major part of the project is being funded by Banks or financial institutions.
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