Kampala campus
Faculty of management studies
Course work test
Name reg no. 1. JAMIRA KADALA 211-033021-03701 2. NANTEZA FATUMA 211-033021-04148 3. ASIIMWE PHIONA 211-033021-03699 4. NANKABIRWA FATUMA 211-033021-04109 5. NALUBOWA RAHMA 211-033023-03762 6. MUWOMGE ABDUL NASHIRI 211-033023-03760 7. NSEREKO ABDUL JALILI 211-033023-03762 8. GALIWANGO ASHIRAFU 211-033023-04008 9. NAMUBIRU SULAIBA 210-033022-03743 10. NAMBATYA FAHIMA 211-033022-03743 11. BIRIBAWA KULTHUM 211-033023-03752
COURSE: BBS
COURSE UNIT: PROJECT PLANNING AND MANAGEMENT
INSTRUCTOR: NANGOLI SUDI
YEAR: 2
QUARTER: 3
QUESTION:
Identify and explain the technical, economic, ecological, financial and market aspects of project finance.
Introduction
Project finance is the long-term financing of infrastructure and industrial projects based upon the projected cash flows of the project rather than the balance sheets of its sponsors. Usually, a project financing structure involves a number of equity investors, known as 'sponsors', as well as a 'syndicate' of banks or other lending institutions that provide loans to the operation. They are most commonly non-recourse loans, which are secured by the project assets and paid entirely from project cash flow, rather than from the general assets or creditworthiness of the project sponsors, a decision in part supported by financial modeling.[1] The financing is typically secured by all of the project assets, including the revenue-producing contracts. Project lenders are given a lien on all of these assets and are able to assume control of a project if the project company has difficulties complying with the loan terms.
Generally, a special purpose entity is created for each project, thereby shielding other assets owned by a project sponsor from the detrimental effects of a project failure. As a special purpose entity, the project company