General Studies · Credit Enhancement Structures
In the structural framework of project financing for large infrastructure assets, the primary objective of establishing a 'Debt Service Reserve Account (DSRA)' is to:
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- 1eliminate the requirement for the project to maintain a specific Debt-to-Equity ratio during the construction phase.
- 2provide a dedicated fund for the mandatory acquisition of competing infrastructure projects in the same region.
- 3guarantee a fixed minimum rate of return to equity investors regardless of the project's actual performance.
- 4act as a liquidity buffer to ensure timely debt servicing during periods of temporary operational cash flow shortfalls.✓
Correct answer
act as a liquidity buffer to ensure timely debt servicing during periods of temporary operational cash flow shortfalls.
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