Beyond project finance

Journal Article · Thu Jun 01 04:00:00 EDT 1995 · Electricity Journal

DOI:https://doi.org/10.1016/1040-6190(95)90123-X· OSTI ID:96042

Churchill, A A

In financing the potential demand for electric power, project finance is a very limited tool, not a universal solution. Governments and developers can make the process less costly by focusing on ways to reduce major risks, and on developing local capital markets. And prospectors should not ignore the overlooked area of electricity distribution. If projects are to attract substantial debt capital, equity will have to increase to at least 50 percent. In a market dominated by large developers, non-recourse or project financing will have a much reduced role. The electric power sector is in a good position to provide these quality financial instruments to developing country financial markets. By undertaking market-making roles, investors in the electric power business can begin to tap into local capital markets and set the stage for successful exit strategies. Increasingly, financing of power plants is possible without long-term agreements, because creditors are becoming more comfortable with the ability of the firm to take market risk.

• OSTI ID: 96042
• Journal Information: Electricity Journal, Journal Name: Electricity Journal Journal Issue: 5 Vol. 8; ISSN ELEJE4; ISSN 1040-6190
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
BUSINESS
CAPITAL
ELECTRIC POWER
ELECTRIC POWER INDUSTRY
FINANCING
MARKET
POWER PLANTS