Recourse in project finance

Project financings are typically structured on a non-recourse (or limited recourse) basis, meaning that the lenders lend not to the sponsors of the project (typically, highly experienced market participants) but rather to a project company, being a special purpose vehicle established solely for the purpose of the project with no assets other than the project assets. As such, it is not uncommon that project finance is also referred to as “non-recourse finance” (or “limited recourse finance”).

This guidance note explains the concept of recourse in a project finance setting, including the relevance of “creditworthiness” and “bankability”.

See Recourse in project finance.