Why Project Bonds?
Project finance is a financing technique used to fund investment
across a broad spectrum of industrial activities, notably in the
natural resources, telecommunications, transportation, social
infrastructure, power generation, and transmission sectors. One of
the primary attractions of project finance for a project's
owner, typically referred to as a "sponsor", is that the
cost of financing a project using this technique can be minimised
to the extent that the debt incurred to finance the project will be
repayable over a long period of time using the proceeds of the
project's net revenues.
At the outset of any project, a sponsor will keenly assess the
financial markets so as to consider how best to finance its
project. As one would expect, one of the sponsor's principal
considerations at this stage will be obtaining the cheapest source
of debt to finance the construction of its project. Factors that
will impact on a sponsor's cost of financing
