ISSN 2581-5369
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Limited Recourse Financing in Project Finance
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Naman Bansal
Student at Maharashtra National Law University, Aurangabad, India
Abstract
Project finance has become a popular way to fund large-scale, capital-intensive projects including power plants, oil pipelines, highways, and tunnels, among other things. In a project finance arrangement where the project's lenders have limited access to the sponsoring company's assets, we examine debt capacity and risk selection. We draw a comparison between project finance loans with limited recourse and susceptible financial guarantee loans. We demonstrate the trade-offs between risk and debt capacity using contingent claims analysis in instances where the project's lenders have recourse to the sponsor's assets and in cases where they do not.
Keywords
Type
Research Paper
Information
International Journal of Law Management and Humanities, Volume 4, Issue 5, Page 2189 - 2201
DOI: https://doij.org/10.10000/IJLMH.112168Creative Commons
This is an Open Access article, distributed under the terms of the Creative Commons Attribution -NonCommercial 4.0 International (CC BY-NC 4.0) (https://creativecommons.org/licenses/by-nc/4.0/), which permits remixing, adapting, and building upon the work for non-commercial use, provided the original work is properly cited.
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