Project Financing

What is Project Financing?

Financing in which lenders rely primarily on cash flow generated by operation of the project as a source of loan repayment; the project’s assets, rights, and interests are held as collateral.

Project financing is an especially attractive option for machine, equipment, and turn-key plant developers.

Characteristics of Project Financing:

1.

Special
Purpose

Project developed through a separate financial and legal entity.

2.

Off Balance
Sheet

Project assessment is not based only on the balance sheet position of the Importer/Guarantor. Accounting treatment of project debt is completely separate from the own borrowings in its consolidated accounts. The eventual Guarantor’s financial position is not affected.

3.

Highly Leveraged
Structures

Allows to maximise debt-to-equity leverage of the project. Normally can be financed from 70% up to 85% of the project amount.

4.

Non-Recourse/
Limited Recourse

Financing can be secured only by the project itself, without recourse to the guarantors.

Glass Service collaborates with major European banks and financial institutions, such as: SACE, Monte dei Paschi di Siena, Unicredit, Banca Intesa, Deutsche Bank, Commerzbank, HSBC, BPM, BNP Paribas. They use a wide range of financial instruments based on the location of the initiative and financial market development in that area.

Case Histories

Saudi Arabia

  • Year: 2003
  • Supply of: Furnace for soda lime glass
  • Loan amount: 1,5 mil euro
  • Repayment: in n°10 half-yearly instalments (5 years) the first one due at 6 months from the shipment
  • Interest rate: Less than 5% per year
  • Documentation: Promissory Notes, covered by SACE insurance policy, signed by the Buyer to the order of the Seller, without any bank Guarantee

Spain

  • Year: 2004
  • Supply of: Furnace revamping
  • Loan amount: 1 mil euro
  • Repayment: in n°10 half-yearly instalments (5 years) the first one due at 6 months from the shipment
  • Interest rate: Less than 6% per year
  • Documentation: Promissory Notes, signed by the Buyer to the order of the Seller, without any bank Guarantee, without SACE insurance policy

Ukraine

  • Year: 2011
  • Supply of: plant for production of glass containers
  • Loan amount: 4,9 mil euro
  • Repayment: in n°10 half-yearly instalments (5 years) the first one due at 6 months from the shipment
  • Interest rate: Less than 4% per year
  • Documentation: Promissory Notes, covered by SACE insurance policy, signed by the Buyer to the order of the Seller, without any bank Guarantee

Replubic of Belarus

  • Year: 2007
  • Supply of: Table ware furnace equipment
  • Loan amount: 0,5 mil euro
  • Type of loan: 5 years post financing to a Belarus bank
  • Interest rate: Less than 5% per year
  • Documentation: Irrevocable and confirmed letter of credit confirmed from SACE insurance policy and financed from Italian bank
  • Year: 2009
  • Supply of: Electric furnace 24% lead crystal glass
  • Loan amount: 4,5 mil euro
  • Type of loan: 5 years post financing to a Belarus bank
  • Interest rate: Less than 5% per year
  • Documentation: Irrevocable and confirmed letter of credit confirmed from SACE insurance policy and financed from Italian bank

Zambia

  • Year: 2013
  • Supply of: Plant for the production of soda lime glass containers
  • Loan amount: 8,5 mil euro
  • Type of loan: 5 years post financing to the customer bank
  • Interest rate: Less than 6% per year
  • Documentation: Irrevocable and confirmed letter of credit confirmed from SACE insurance policy and financed from an European bank
  • Year: 2015
  • Supply of: Machines for glass industry
  • Loan amount: 1,2 mil euro
  • Type of loan: 5 years post financing to the customer bank
  • Interest rate: Less than 6% per year
  • Documentation: Irrevocable and confirmed letter of credit financed from an European bank

Ethiopia

  • Year: 2018
  • Supply of: Engineering services for construction of Container Glass manufacturing plant
  • Loan amount: 0,8 mil USD
  • Type of loan: 1 year post financing to the customer bank
  • Interest rate: Less than 6% per year
  • Documentation: Irrevocable and confirmed letter of credit financed from an European bank
  • Year: 2019
  • Supply of: Container Glass manufacturing plant
  • Loan amount: 12,5 mil USD
  • Type of loan: 1 year post financing to the customer bank
  • Interest rate: Less than 5% per year
  • Documentation: Irrevocable and confirmed letter of credit financed from an European bank

Glass Service’s Project Financing Service actively aids customers in finding the right financing for their project’s needs at the best
borrowing rates on the international financing market.