Project Finance Solutions for Businesses & Infrastructure Projects

Project finance is a structured funding method where the loan repayment depends primarily on the cash flow generated by the project, rather than the borrower’s overall balance sheet. It is commonly used for infrastructure, real estate, manufacturing, energy and large scale industrial projects.

Project finance eligibility generally includes,

• Companies, LLPs or SPVs (Special Purpose Vehicles)
• Minimum 2-3 years of promoter experience
• Approved project feasibility and financial model
• Clear statutory and regulatory approvals
• Acceptable credit profile of promoters

Innovative project finance solutions combined with secured loans can support emerging industries such as EV manufacturing, drone technology, electrical and electronic, solar power projects, robotics, AI based ventures and other technology driven businesses. By pledging eligible assets as collateral, businesses can secure higher funding with competitive interest rates and structured repayment aligned with project cash flows, enabling smooth execution and scalable growth of innovative projects.

Project finance interest rates in India typically range between,

• 9.5% to 16% per annum

Rates depend on,

• Project risk and sector
• Cash flow stability
• Loan tenure and size
• Type of lender (bank, NBFC and lending companies)

Lenders usually finance,

• 60% to 75% of total project cost

The remaining amount must be brought in as promoter contribution or equity.

Project finance loan tenure usually ranges from,

• 5 to 15 years

Tenure is structured to match,

• Project life cycle
• Revenue generation period
• Debt servicing capacity

Yes, project finance loans are typically secured loans. Collateral may include,

• Project land and assets
• Machinery and equipment
• Escrow of project cash flows
• Personal or corporate guarantees (in some cases)

Repayment is usually aligned with project cash flow and may include,

• Moratorium during construction phase (6-36 months) may vary case to case
• Structured EMIs post commercial operation date (COD)
• Cash flow linked repayment schedules

Project finance is commonly used for,

• Real estate and infrastructure projects
• Power and renewable energy projects
• Manufacturing and industrial units
• Warehousing and logistics parks
• Roads, bridges and urban infrastructure
• Commercial project loans
• It parks

Project finance approval timelines generally range between,

• 30 to 90 days

This includes,

• Technical appraisal
• Legal due diligence
• Financial viability assessment

Key documents include,

• Detailed Project Report (DPR)
• Land ownership and approval documents
• Financial model and cash flow projections
• Promoter KYC and financial statements
• Statutory and environmental clearances

A moratorium period is a repayment holiday during the construction or initial operational phase. It typically ranges from,

• 6 months to 3 years, It may vary for different projects.

This allows the project to stabilize before repayments begin.

Yes, startups can access project finance if,

• Promoters have strong industry experience
• The project shows clear revenue visibility
• Adequate equity contribution is available
• Risk mitigation structures are in place

The key difference between project finance and term loans is the repayment source and loan structure. In project finance, repayment is primarily made from the cash flow generated by the specific project, whereas term loans are repaid from the overall income of the company. Project finance involves detailed technical, legal, and financial due diligence, offers a longer tenure, and is mainly used for large-scale or capital-intensive projects. In contrast, term loans usually have faster approvals, a shorter tenure, and are commonly used for general business or working capital needs.

Project finance is preferred for large projects because it allows funding to be structured based on the project’s future cash flows rather than solely on the company’s balance sheet. This enables businesses to secure higher funding with longer repayment tenures while managing financial risk effectively, making it ideal for infrastructure, industrial, energy, and large expansion projects.

If revenue is delayed,

• Moratorium extension may be considered
• Restructuring or rescheduling of repayments
• Additional equity infusion may be required

Repeated delays can trigger loan covenants and recall clauses.

• Non recourse: Lender relies only on project cash flows and assets
• Limited recourse: Promoter support applies during construction or stress Most Indian project finance loans are limited recourse.

Yes. Once the project stabilizes,

• Construction loan can be refinanced into long term debt
• Interest rates may reduce by 1-2%
• Tenure may be extended to improve cash flow