Smaller deals are becoming more widespread in the current
project finance era, impacted by a focus on ESG. While there are
fewer very large prestige projects, the increasing number of deals,
alongside geopolitical shifts, present opportunities across the
board.
Project finance is facing huge reversals in some of the most
important macro themes that have driven the industry for decades.
For example, in many types of project finance – such as
energy production – instead of developing larger and larger
prestige projects, the prioritisation of ESG-led deals has resulted
in more but smaller deals.
In many ways this spreading of investment helps sponsors and
investors diversify portfolio risk, but it adds complexity and cost
by requiring more work to put the same amount of capital to work
across more projects. It also adds challenges from an
administrative and regulatory perspective, with the need for
partners such as collateral agents to be able to support
