Economics · Infrastructure Financing
In the context of infrastructure project financing, the concept of 'non-recourse financing' is best described as a structure where:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1repayment of the principal is guaranteed by a multilateral development bank regardless of the project's operational status.
- 2the project sponsors are required to provide 100 percent collateral in the form of liquid cash for the entire duration of the loan.
- 3the debt is serviced primarily from the project's cash flows and the lenders' security is limited to the project's own assets and contracts.✓
- 4the lenders have a full and unconditional claim on the parent company's balance sheet in the event of project failure.
Correct answer
the debt is serviced primarily from the project's cash flows and the lenders' security is limited to the project's own assets and contracts.
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