INTRODUCTION ABOUT INFRASTRUCTURE FINANCING
Today, in the era of economic boom, the availability of infrastructure facilities is imperative for the overall development of any country. And in this respect, India can’t be behind from other countries. Hence, now along with the need to focus on enhancing the quantity of infrastructure services, in India there is also a requirement of improving the quality of infrastructure services.
So, first of all it is required to know what Infrastructure Financing is all about. A project is an activity that involves investing a sum of money now in anticipation of benefits over a period of time in future. The name Infrastructure Financing itself gives a clear idea that it is about financing large infrastructure projects like road construction, bridge construction, port construction, hotel construction, power plant construction and so on. It’s a huge concept and for each kind of infrastructure project different financing techniques are being adopted. Here are some of the salient features of infrastructure financing project:
The lenders finance the project looking at the creditworthiness of the project, not the creditworthiness of the borrowing party. The repayment of the loans is made from the earnings of the project.
Project financing is also known as “limited recourse” financing as the borrower has a limited liability. The security taken by the lenders is largely confined to the project assets.
For most of the twentieth century, publicly financed infrastructure was the widely accepted norm. It was only in the closing years of the century that private financing made a huge comeback. It is now well understood that private capital will have to build a large part of the infrastructure that we need in India over the coming years. However, the private sector can play this role only if it has access to domestic or international sources of financing for both... [continues]
Today, in the era of economic boom, the availability of infrastructure facilities is imperative for the overall development of any country. And in this respect, India can’t be behind from other countries. Hence, now along with the need to focus on enhancing the quantity of infrastructure services, in India there is also a requirement of improving the quality of infrastructure services.
So, first of all it is required to know what Infrastructure Financing is all about. A project is an activity that involves investing a sum of money now in anticipation of benefits over a period of time in future. The name Infrastructure Financing itself gives a clear idea that it is about financing large infrastructure projects like road construction, bridge construction, port construction, hotel construction, power plant construction and so on. It’s a huge concept and for each kind of infrastructure project different financing techniques are being adopted. Here are some of the salient features of infrastructure financing project:
The lenders finance the project looking at the creditworthiness of the project, not the creditworthiness of the borrowing party. The repayment of the loans is made from the earnings of the project.
Project financing is also known as “limited recourse” financing as the borrower has a limited liability. The security taken by the lenders is largely confined to the project assets.
For most of the twentieth century, publicly financed infrastructure was the widely accepted norm. It was only in the closing years of the century that private financing made a huge comeback. It is now well understood that private capital will have to build a large part of the infrastructure that we need in India over the coming years. However, the private sector can play this role only if it has access to domestic or international sources of financing for both... [continues]
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