Project finance is one of the best ways to raise funds and finance for projects related to various sectors. In this article we are discussing the different areas of project finance and sectors that are of keen value for the country’s development and growth. Also, the required expertise that is essential for project finance in India is also discussed in detail.
Areas of Project Finance:
Table of Contents:-
The following are the sectors and areas of project finance-
- Infrastructure sector: The very first area of project finance is the infrastructure sector which includes the following-
- Transport and Logistics: This is the area or sector that includes construction of the following-
- Ports
- Airports
- Shipyards
- Roads
- Bridges
- Inland Waterways
- Transportation pipelines for bulk material
- Infrastructure logistics
- Public transport in urban areas excluding the rolling stocks for urban road transportation.
- Railway tracks that includes tunnels, electrical system, signaling system, bridges and ducts
- Infrastructure of railway terminal which includes railway stations, commercial infrastructure adjoined with it
- Rolling stock of railway rolling with workshop and associated facilities of maintenance
- Communication: This area of finance project includes-
- Telecommunication towers
- Telecom services
- Telecommunication through fixed networks
- Water and Sanitation: Water and sanitation are very important sector of infrastructure for any country. It includes-
- Water treatment plants
- Sewage collection, treatment and disposal system
- Irrigation facilities by building dams, embankments and channels
- Solid waste management system
- Storm water drainage system
- Social and Commercial Infrastructure: One more important area of project finance is the infrastructure for social and commercial use in the country. It includes building the following-
- Hospital and health facilities
- Sports and fitness infrastructure
- Educational institutions
- Terminal market places
- Housing plans with necessary facilities at affordable rates
- Cold storage chains
- Laboratories for soil testing
- Infrastructure for storage post-harvesting for agriculture, horticulture produces etc.
- Common infrastructure for the industrial and commercial parks which includes activities for industries such as textile parks, tourism facilities, food parks, agricultural markets and Special Economic Zones.
- Infrastructure for tourism which includes the following:
- Ropeways
- Cable cars
- Hotels with three or higher star category in cities that are located away from places with more than one million population.
- Energy: One of the key areas of project finance, energy sector includes the following-
- Generation of electricity
- Transmission of electricity
- Distribution of electricity
- Storage facility for oil, gas, Liquefied Natural Gas (LNG) etc.
- Non-infrastructure sector: The second important area of finance project is the non-infrastructure sector which is of equal importance as the infrastructure sector. It includes the following-
- Manufacturing: The manufacturing sector is one of the most important areas of finance project. It has the following units included-
- Steel production
- Mining
- Cement manufacturing
- Textiles industry
- Pharmaceuticals
- Chemical production
- Engineering sector
- Pulp extracting and paper making industry
- Auto components manufacturers
- Services: The service sector has become of keen importance in the recent times with the growth and development of the consuming sector. It includes the following sectors-
- Tourism
- Hospitality sector
- Health industry
- Educational institutions
- Fitness parks and industry
Expertise required in Areas of Project Finance:
The following expertise and knowledge is required for the areas of project finance to carry on a project with great efficiency and effectiveness-
- Debt advisory services
- Rupee term loan
- Syndication of loan
- Loan underwriting expert or underwriter
- Term loan in foreign currency term loan
- Bonds that are convertible/GDR/ADR
- Guarantee in deferred payments
