Project Financing ‐ financing of a company’s investment project under the following conditions:
- Risk sharing between the owners of the Project and the Bank;
- Source of repayment ‐ cash flow generated by the Project Assets*;
- The Borrower can be a company approved and authorized by the Project Sponsors** to implement, develop, manage and own the Project’s Assets*.
* Project Assets refer to the assets generated as a result of the Project implementation.
** Sponsor(s) ‐ legal entities and/or individuals, directly and/or indirectly owning the Project Company, and financing the Project by equity contribution and subordinated loans.
Basic information for the Bank to consider its participation in the Project:
- General description of the Project;
- Information regarding Project’s sponsors;
- Description of the market situation (incl. demand and proposals on the market);
- Description of production process (incl. main suppliers, production technology, production costs and another factors that can influence on production);
- Description of (potential) off-takers;
- Detailed Project Budget with breakdowns of sources of financing (equity/loan);
- CF-model of the Project for period not less than financing tenor.
Standard financing forms:
- Non-Recourse Project Financing ‐ basic type of project financing when the main and the only one source of repayment is cash flow generated by the Project. Collateral is limited only by the assets related to the Project. Absence of any additional collateral (not related with the Project) /any other obligations from the Project Sponsors’ side;
- Limited Recourse Project Financing ‐ type of project financing when source of repayment and/or collateral structure are not limited only by cash flow / assets of the Project (could be presented by another cash flow/ assets not related with the Project).
Basic conditions of financing:
- Type of financing ‐ term loan or combination of term loan and revolving credit line for financing of working capital expenses related with put into operation of the Project;
- Currency of financing ‐ EUR, USD, UAH;
- Minimum amount of limit of financing ‐ EUR 1’000’000 or its equivalent in another currencies (in USD and/or in UAH);
- Minimum equity contribution (funds contributed by the Borrower/owners /Sponsors) ‐ 30% of the Project Budget;
- Tenor of financing ‐ up to 5 years;
- Availability period ‐ not exceeding the period of construction/installation/start-up;
- Principal Grace period ‐ possible (usually can be provided/established for the period up to 6 (six) months from the end of Availability period;
- Pricing ‐ defined individually for each specific deal and depending on a deal structure and current market rates;
- Flat fee ‐ up to 1.25% of the Limit amount;
- Loan maintenance fee ‐ up to EUR/USD 5,000 per year;
- Early repayment fee ‐ up to 3% of the early repaid amount.
Basic preconditions for funds disbursement:
- Loan, Security\Pledge and Project Documentation shall be: a) acceptable to the Bank in its sole discretion, b) duly executed, c) registered if necessary, d) in full force and effect;
- Insurance of the collateral in OTP bank’s favor by insurance company acceptable to the bank in a form and by substance satisfactory to OTP bank. Confirmation that insurance premium is paid and insurance came into force;
- Obtaining by the Bank of all registrations, approvals, licenses and permits for the realization of the Project (if such documents are required according to existing legislation);
- Confirmation by the Borrower of Equity Contribution up-front in full;
- Arrangement fee (flat fee) is paid.
Type of collateral (to be defined depending on structure of each deal) but the typical collateral is the following):
- Pledge of assets (real estate and fittings/equipment) of the Project Company;
- Pledge over Project Company accounts in the Bank;
- Pledge on shares/ on corporate rights in the Project Company;
- Assignment of claims against the constructor during the Completion Phase (including bonds to be proved by constructor);
- Assignment of claims against Off-Takers during the Repayment Phase;
- Assignment of insurance proceeds;
- Cross-Collateral (real estate and fittings/equipment) and Cross-Sureties from Project Sponsors and/or Group’s Reliable Members;
|More detailed information can be obtained by calling the Information Center|