PROJECT

PROJECT
FINANCE
PROJECT FINANCE
Project finance is the nonrecourse financing

of long-term infrastructure, industrial
projects and public services based upon a
complex financial structure where project
debt and equity used to finance the project
are paid back from the cashflow generated
by the project rather than the general assets
or creditworthiness of the project owners.
The financing is typically secured by the
project assets, including the revenue-
producing contracts. Generally, special
purpose corporations (SPCs) are created
for each project
CORPORATE FINANCE
Corporate finance is a specific area of

finance dealing with the financial
decisions corporations make and the
tools as well as analysis used to
make these decisions. The primary
goal of Corporate finance is to
enhance corporate value, without
taking excessive financial risks.
DOCUMENTS NEEDED BY
BANKER FOR PROJECT
FINANCE
1. I.D proof (voters card/ driving license/ passport for
individuals only).
2. Address proof ( ration card/electricity/phone bills for
individual only).
3. P.A.N card (both by company/business &
individuals)
4. Individuals/shareholders have to give there
personal bank statements (last 6 months).
5. Trade license of company.
6. I.T.R of last 3 years (both company/ business &
individuals, shareholders).
7. Audited balance sheet of last 3 years ( only for
company).
8. Current account statement of last 1 year (only for
company)
9. Project report of C.A ( project must be geniune &
viable).
10. Property papers/ all documents (like deeds,
search reports &
& title verification report (gold search report),
authorization of values etc.
11. Certificate of incorporation.
12. I.S.O certificate, if any.
13. Affidavit of non- encumbrance.
14. Company/ business detalied profile.
ADDITIONAL DOCUMENTS IF
NEEDED
1. Any kind of loan sanction letter.
2. Current loan deduction bank account (statement
of last 3 years)
PROJECT APPRAISAL
The first step towards financing of a project is the
making of the project report. A project report is a
detailed report of all the aspects of an investment
proposal including the nature of goods or services to be
produced, its likely market demand the proposed
location of the plant, the technology to be used, the
estimated cost and returns, etc. The project report
which is prepared by the borrower has to be appraised.
Project appraisal is a prerequisite for funding. Though
the project may appear to be most desirable on paper
but its viability from the point of view of technical
viability, financial feasibility, market potential,
management appraisal, environmental and ecological
implications, etc. have to be systematically reviewed
and assessed. The general appraisals which have to
be conducted and briefly explained hereinafter.
TECHNICAL APPRAISAL
Technical feasibility analysis is primarily conducted to
ensure that the project is technically sound. It
examines the project idea, manufacturing
processes, plant and machinery as well as other
equipment and know-how, etc. proposed to be
used. Whether the technology is obsolete or too
advanced, whether it is indigenously available or
has to be imported, the technical transfer
arrangement if any. availability of qualified
personnel, etc. are other areas which have to be
studied.
ENVIRONMENTAL APPRAISAL
Environmental and ecological appraisal has become a very
important part of project appraisal. Any damage to the
environment as a result of technology used or wasted not being
managed properly needs to be examined. Substitute raw
materials, eco-friendly technology. Minimization of emission or
Renewable uses for waste materials are other aspects meriting
serious attention. In many countries, there are legal provisions
regarding environmental norms which to be adhered to.
When the above feasibility parameters produce a
positive results only then the funding agencies will consider
grant of finance for the project.
FINANCIAL APPRAISAL
An assessment of total financial requirements
including those for fixed capital, working
capital as well as establishment costs ,etc.
has to be made. The sources from where
the funds have to be obtained have to be
identified. The cost of funds has to be
calculated and projected rate of returns
have to be estimated .Only if the project is
able to services debts and satisfy return
expectations it will be considered
financially viable.
MANAGEMENT APPRAISAL
The character or willingness of the borrower
the reputation and goodwill, vigour and
enthusiasm are all very important aspects
for the success of the venture. The
educational, technical qualification and
experience of the borrower/managerial
team are other important factors which
have to be kept in mind. If the management
is not efficient, reliable or credible, then the
chances of success of the business
become remote.
DONE BY,
NIKITA
SANJANA
MAMTA
THANKS

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Project finance is the nonrecourse financing

Corporate finance is a specific area of

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