Project financing is a key element of investments in the industry and infrastructure sector. In general, a project developer seeks to finance a significant part of the construction costs by borrowing through a special purpose vehicle, which tends to take the legal form of a limited liability company. For this reason financiers need a comprehensive risk assessment and a well-documented project basis before making any financing decision, and a suitable process to monitor the progress and quality of the project during implementation.
Role of ILF
ILF provides engineering and management services to enable financiers to evaluate project risks before signing a financing agreement and subsequently until repayment of financing has been completed.
Using the experience gained from planning and executing significant investment projects, ILF’s experts make an assessment of the construction budget and schedule and check whether the assumptions of the financiers are reasonable and include sufficient financial reserves.
Additional services rendered by ILF include checking the availability of sufficient financial reserves, previous concepts and the financial model for the baseline scenario (base case).
Following financial closure, ILF will monitor progress against plan until repayment of financing has been completed. ILF’s services furthermore include preparing a comparison of the project revenues and the repayment requirements during construction and operation.
Benefits to Clients
ILF has developed a reliable roadmap for the provision of technical advisory services to financiers which comprises pre-defined review and evaluation criteria. This enables ILF to carry out transparent and efficient reviews in keeping with the responsibilities of a technical advisor to a financier. ILF’s advisory services will provide a clear understanding and quantification of the major project benefits and risks, and recommendations to improve benefits and mitigate risks. As a result, benefits and risks of a project will become more calculable.