Project Finance

Updated: Dec 23, 2019

Our attempt is to share the work we do or else experience, in the form of these brief write-ups. I am currently visiting my native town (Nagpur, Maharashtra, India) and am privileged to spend good quality time with my near and dear ones in the city I grew up. We have a family business which is very diversified in fields of Plant and Machinery Testing/Audit, Safety Audit, Calibrations of instruments in various forms like length and tensile, in short very specific to Mechanical Engineering. My late father set it up, and my brother is now leading the group with some fantastic experienced staff.

Given my background in Computer Science Engineering and an MBA in Finance, I gladly assist in related initiatives within the firm and quite aptly this time we are looking into electronic automation initiatives. Replacing parts of existing automation to latest technology as well as introducing efficiency to repetitive manual processes in place. This Project(s) will have to be financed within, from the current cash flows and thus financing remains a major decision factor in materializing initiatives. Vendors are being talked through in these pre-project confirmation phase. This entire process reminds me of some leadership roles that I worked on while in global organisations in the United Kingdom. Project size might be different, procedure remains the same.

On another front, while bringing the experience back to home town, I am quite fortunate to witness some major infrastructure and public developments in my City. Any where we go, lot of construction work is in progress to bring the new Metro / Subway lines into operation. This place appears fast growing with new fly-overs, some under construction. Lot of employment is being created thus and people seem to be generally happy. A massive project seen coming to fruition due to the effort initially taken by the new State Government with links to City! Great people come from different places and its a proud feeling to see these people going out and bringing change to their roots.

My these experiences brings me to the current topic of Project Finance. Investopedia very accurately captures its meaning:

"Project finance is the financing of long-term infrastructure, industrial projects and public services based upon a non-recourse or limited recourse financial structure, in which project debt and equity used to finance the project are paid back from the cash flow generated by the project."

Seeing theory work into practical world is wonderful, as seen through each of the experiences mentioned above. Feel free to right back or else leave comments for further discussion.