Economics · Public-Private Partnerships and Project Finance
In the context of Public-Private Partnership (PPP) projects, the achievement of 'Financial Closure' is a critical milestone for lenders and the authority primarily because it signifies that:
- 1The project's credit rating has been upgraded to investment grade by at least two SEBI-registered rating agencies.
- 2The government authority has transferred the entire project land to the concessionaire and obtained all environmental clearances.
- 3The concessionaire has successfully executed all necessary financing agreements and fulfilled conditions to have immediate access to the total debt and equity required.✓
- 4The project has reached its Commercial Operation Date (COD) and has started generating toll or user fee revenue.
Correct answer
The concessionaire has successfully executed all necessary financing agreements and fulfilled conditions to have immediate access to the total debt and equity required.
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