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
- finance
- lenders
- limited recourse
- trade-offs
- risk
- debt
- assets
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.
Copyright
Copyright © IJLMH 2021