Banking & Finance analysis: What might Brexit mean for project finance? Philip Vernon, global practice co-head of corporate projects at Ashurst, sets out his view on the short-term and long-term implications for project finance.
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Project accounts and the accounts agreementIn a typical project finance transaction, the lenders rely heavily on the revenues generated by the project for repayment of the loan. As a result, project finance lenders will impose strict restrictions on how the project company uses its cash. This
Project finance—financial model and assumptionsBefore embarking on a potential project, the proposed sponsor must prepare a 'feasibility study' to assess the project's viability. A feasibility study analyses the key elements of a proposed project (eg issues relating to the economics of the project,
Operation and maintenance contracts—key issues for project finance lendersMost projects are underpinned by a complex web of contractual relationships between all the parties involved in the project (eg the project company, equity investors, contractors, sub-contractors, off-takers and suppliers).
Project finance—meaning of completion and its effectProjects involving the development of a new asset or facility (known as 'greenfield' projects) are generally split into two phases: construction and operation. In a project finance transaction, completion marks the end of the construction phase of
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