Source of funding in project finance

A project may be financed from several sources. The structure of any particular transaction will largely depend on the source of finance. This guidance note provides an overview of selected common sources of funding, including:

• • loans from commercial banks (such as in the form of syndicated loans);
• • finance provided by large institutional investors, such as superannuation funds and pension funds;
• • capital markets financing (bonds); and
• • assistance provided by export credit agencies.

This guidance note also considers the issue that Australia’s major trading banks often struggle to provide the long-tenor debt required to finance large projects on terms that are competitive with their overseas counterparts, and how the gap in the market for longer-tenor debt can be filled.

See Source of funding in project finance.