Banking · Project Finance & Infrastructure Lending
In a project-financed infrastructure transaction, lenders usually insist on detailed contractual allocation of risks among the concessioning authority, EPC contractor, O&M contractor, insurers, and the project company. The main reason for this insistence is that project debt is repaid primarily from:
- 1project-generated cash flows under a ring-fenced structure✓
- 2sponsor group dividends
- 3resale value of promoter shares
- 4unsecured support from vendors
Correct answer
project-generated cash flows under a ring-fenced structure
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