Project Financing

EXECUTIVE SUMMARY:

This research reports intends to explain the Project Financing of SIDBI.

PURPOSE: - Project financing is an innovative and timely financing technique that has been used on many high-profile corporate project, it has long been used to fund large-scale natural resource projects, from pipelines and refineries to electric-generating facilities and hydro-electric projects. Increasingly, project financing is emerging as the preferred alternative to conventional methods of financing infrastructure and other large-scale projects worldwide.

The purpose of this paper is to explain, in a brief and general way, the manner in which risks are approached by financiers in a project finance transaction. Such risk minimization lies at the heart of project finance.

OBJECTIVES OF RESEARCH:-

* To identify various determinants of project financing.

* To determine the various risks involved in financing a project.

DESIGN/METHODOLOGY/APPROACH:-

* Area of the study:-The study was mainly concentrated in Jalandhar.

* Research Design:- Descriptive research

* Data Collection: Secondary Data: Secondary data was collected from e-papers, magazines, web sites and from other relevant publications.

FINDINGS:-

The finding of this study indicates that Project financing is largely an exercise in the equitable allocation of a project’s risks between the various stakeholders of the project. Indeed, the genesis of the financing technique can be traced back to this principle. Roman and Greek merchants used project financing techniques in order to share the risks inherent to maritime trading. A loan would be advanced to a shipping merchant on the agreement that such loan would be repaid only through the sale of cargo brought back by the voyage (i.e. the financing would be repaid by the ‘internally generated cash flows of the project’, to use modern project financing terminology).

Project finance is the long-term financing of infrastructure and...