Project Finance is the long term financing of large projects, based on the project's cash flows rather than on the balance sheets of the companies. In a Project Finance scheme, a Special Purpose Company is being funded with debt and equity to build and operate the power plant. During operation time, the Special Purpose Company, then a fully grown-up solar power plant, pays debt service and distributes dividends to shareholders.
Project finance has numerous benefits: it allows to mobilise large volumes of debt, catalyses large investments and helps to share risks between equity investors and lenders. With project finance, investors can leverage their returns and multiply their investments.
Project developers need to have a realistic view on finance and investment attractiveness of their project, from the early stage on. Project Finance works as a guidance and key to make realistic assumptions on the business case, to choose a „bankable“ technology supply and other key contracts and to select the right partners for realisation. Eventually, debt and equity providers base their decisions not only on financial figures alone, but also on qualitative criteria such as the right market environments, risk allocation structures in the projects, key stakeholders, permits, authorizations and other aspects.
Suntrace helps to develop and implement solid project structures to reach investment attractiveness and bankability. We work to provide competitive, tailor-made financing and investment solutions - robust, repeatable and viable for the long run.