Project financing documentation

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To protect the lender from unnecessary risks, several project contracts are concluded. They help to resolve important issues of the initiative and establish who bears the risks at different stages. The number of contracts may vary.

Such documents include:

A project agreement that describes the terms of delivery of goods or services in a project if one of the investors will also benefit from the development. For example, if a coal mining company finances the construction of a port to export its product, this agreement would govern those deliveries.

A design and namibia email list construction contract concluded with design and construction organizations, as well as with equipment manufacturers and other parties at the investment planning stage.

Operation and maintenance contracts, if third parties are involved in these tasks. This helps to ensure reliable work on the project implementation.

A contract for the supply of energy, fuel or raw materials when needed. In the context of energy shortages in some regions of the Russian Federation, such a document may be especially important for accurate planning of income and expenses.

Conclusion of all project agreements that cover the main aspects of the initiative.

Agreement on state support, if the project requires such support for implementation.

Direct agreements establishing a link between the lender and the parties to the project agreements. These agreements are important for clearly defining how each project participant will treat the assets formed or acquired during implementation, especially in the event of property disputes.

The more project contracts that are prepared before funding is raised, the clearer the risks of the initiative are distributed. This reduces uncertainty for the lender, which increases the chances of loan approval and reduces the interest rate. A complete set of all the necessary documents is rare, but it is worth trying to collect at least some of them before receiving funding.

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Preliminary analysis and evaluation of the project financing object
Once all the required documents have been received, the lender begins assessing the project's potential. This stage includes an analysis of opportunities and risks and is divided into five separate areas:

Technological analysis is an assessment of the reasonableness of the proposed project construction plan and its operating conditions, as well as the feasibility of their implementation. Economists and credit analysts working in the field of PF banks do not only carry out financial calculations. They are forced to become experts in various fields, such as construction, industrial production, cattle breeding and others, in order to conduct a comprehensive assessment of projects.

To understand an initiative, you first need to understand how the business operates. In banks with many projects, employees work in different industries to better understand each of them. This is important because many ideas fail not because the market was misjudged. The reason is this: the project company failed to start implementation on time and according to plan.

Legal analysis is another important part of the project work. In areas such as construction, oil and gas, and pharmaceuticals, legal aspects can be even more complex than the investment part of the project. Therefore, analysts must pay special attention to legal issues to minimize risks and ensure successful implementation.

The assessment of financial solvency is based on the development of the project budget and the formation of a sufficient financial reserve at each stage. Monetary issues are resolved in the process of creating a financial model of the project, which serves as both the main analytical tool for studying its prospects and a means for achieving agreement among all participants.

The analysis of the project's effectiveness covers the calculation of standard indicators. The initiative is assessed from both the investor's and the lender's point of view.

Risk analysis focuses on assessing how vulnerable a project is to changes in forecast data. It involves examining various project scenarios and assessing potential losses for both parties – the investor and the lender.

The main work of the PF department is focused on the first two stages and on preparing data for the financial model. At these stages, it is difficult to use the same methods, because each project has its own characteristics. But at later stages.