Project Financing may be defined as the raising of funds on a limited recourse or nonrecourse basis to finance an economically separable capital investment project in which the providers of the funds look primarily to the cash flow from the project as the source of funds to service their loans and provide the return of, and a return on, their equity invested project. The terms of the debt and equity securities are tailored to the cash flow characteristics of the project. For their security, the project debt securities depend mainly on the profitability of the project and on the collateral value of the project’s assets. Project financing typically includes the following basic features:

An agreement by financially responsible parties to complete the project and, toward that end, to make available to the project the funds necessary to achieve completion; and,

An agreement by financially responsible parties that, when project completion occurs and operations commence, the project will generate sufficient cash flow to enable it to meet all its operating expenses and debt service.

With this in mind, the successful financial engineering and structure programming is the Nobilis Global delineator. The term project financing is widely misused and perhaps even more widely misunderstood. To clarify the definition, it is important to appreciate what the term does not mean. Project financing is not a means of raising funds to finance a project that is so weak economically that it may not be able to service its debt or provide an acceptable rate of return to equity investors. In other words, it is not a means of financing a project that cannot be financed on a conventional basis. Project financing requires careful financial engineering to allocate the risks and rewards among the involved parties in a manner that is mutually acceptable.

The ideal candidates for project financing are capital investment projects that:

1) are capable of functioning as independent economic units;

2) can be completed without undue certainty; and

3) when completed will be worth demonstrably more than they cost to complete.

In determining whether project finance might be an appropriate method of raising funds for a particular project, Nobilis Global considers five factors:

1) The credit requirements of the lenders in light of both the expected profitability of the project and the indirect credit support to be provided by third parties.

2) The tax implications of the proposed allocation of the project tax benefits among the parties involved.

3) The impact of the project on the covenants contained in the agreements governing the sponsors existing debt obligations.

4) The legal or regulatory requirements of the project must satisfy all those that may be involved.

5) The accounting treatment of project liabilities and contractual agreements acceptable to all, with the proper risk management in place.

Nobilis Global carefully engineers each project before seeking funders or investors to make sure all qualifications are fully empowered. It is important to Nobilis Global that the client feel comfortable at all times, and that the funder is in complete awareness and transparency, both with a keen sense of time sensitivity and action with focused purpose.

For further information on Nobilis Global Private Equity, please contact us by email: info@nobilisglobal.com, phone: 202 - 798 - 4706