To start with, Project Finance banking includes financing resources required in the project for a long term. Now the question is when can the dept be repaid? Now the repayment of dept can take place when the project starts generating operating cash flow but in this, there is no guarantee of the shareholders. Financing of projects is not only a complex transaction but it is also challenging because the successful structure of terms should be reliable with the basic features of projects and also in interest of the banking institution that is financing the project. Hence, getting this coordination pose the biggest challenge for Project Finance banking.
The process of project financing, demands financial resources and expertise like innovative ideas, access to capital via local knowledge and skilled specialist, who has through knowledge of the field. In addition, the services provided by the banks should be customized to the unique requirement of the project, hence developing and carrying out financing that can maximize the value of the project in economic terms.
Generally, project finance banking service supports the project until it reaches its operational phase. This might need a decade or more periods. They even try to extend the service as the demands and need of the project evolve.
There are number of banks and other institutions present in the market that are ready to finance project in various fields. Some of the fields where these institutions give their helping hand are discussed below along with the kind of support they provide.
Project Finance Banking in energy & commodity – in this area financial services are provided to cover all commodities and fulfilling all needs staring from exploration until production, then comes logistics and at last transformation.
Next is Asset Finance – in the financial service involves a broad range of financing based on fixed asset like Real Estate, transportation, etc.
other is Finance for Leveraged & Project - this provides cash flow on a long term basis for projects such as restructurings, buying outs along with committed financing services for media and telecom companies.
One more is Corporate Acquisition – under this facilities are arranged and underwritten for a long term
Loan Syndications as well as Trading- this covers all the global organization which need support for lending activities as well for some financing business, also it undertakes prices and distributes to institutional investors and banks and to the insurance groups which provide coverage for political and credit risk.