Project Finance

Facilities are most commonly financed using the company’s general corporate credit. The “equity” for the project is provided by the company’s balance sheet and cash flow producing, in effect, 100% financing. In some cases, however, a company doesn’t want to impair its ability to borrow for “core” equipment and facility needs or the size of the project is larger than it could normally handle. If so, “Project” or “non-recourse” finance may prove beneficial where the lender looks only to the assets/cash flows of the “project” and the sole purpose corporate entity formed to develop and operate it.

The basic components are mainly contractual. That is, the project must have secure contracts for waste supply and residue as well as a secure market for any energy, recyclables, compost and/or other product produced. In addition, the project’s construction and ability to operate must be guaranteed by an engineering, procurement and construction (“EPC”) contractor with the financial wherewithal to support its guarantee. If true “project finance” cannot be arranged, we can sometimes negotiate a hybrid structure somewhere between project and corporate finance. We would be happy to provide information about negotiating these types of financing structures.