Project finance

Most transactions in global capital involve one party providing the capital while the other party provides a return for that capital. The specifics of this transaction can vary — from something as simple as a small loan, to something as complex as a long-term venture investment.

When it comes to project financing, what’s usually involved is a long-term construction project of some kind — such as industry, public service or infrastructure. One party, or parties, is looking to build such a project, while another party, or parties, is willing to provide the financing — for a return, of course.

A certain structure

off-balance-sheet investment

Project financing can take on various forms, but one of the most common is known as build, operate and transfer (BOT) in which a special purpose vehicle (SPV) is utilized when a company subcontracts most aspects of both construction and operation, each of which comes with its own challenges and structures.

In the construction phase, the most risk is assumed since there is no incoming revenue from operations. As a result, the project often remains in what is know as off-balance-sheet status, which reduces the potential impact on company shareholders, allowing them to use debt for other projects or investment, too. It is then through the operational phase that a more traditional on-balance-sheet structure is adopted, revenues streams flow in, less risk is involved, and returns are captured by investors.

Matching investors with project builders

It’s clear, given the amount of time and complexity involved with project financing, it’s not easy to navigate such waters without help. That’s where ASCEND GRP come in. We use our extensive experience in all forms of financing, especially in the construction sector, but in other areas, too, to match investors willing to take on the specific challenges of project financing with companies dedicated to not only build such projects, but carry them out to fruition, and thus pay out on returns to investors, too.

At ASCEND GRP, if there’s a will to get project financing done, we find a way — every time for our valued investment clients. Talk to us today on how we can help you with your project finance goals.