Project Finance Advisory Services in India

Project Finance Advisory Services in India

Project Finance Advisory Services help businesses, project sponsors and investors evaluate, structure and raise finance for large projects based primarily on the project’s expected cash flows, commercial viability and risk profile.

Project financing is commonly relevant for infrastructure, manufacturing, renewable energy, power, transportation and other capital-intensive projects requiring substantial long-term funding.

EzyBiz India Consulting LLP provides Project Finance Advisory Services in India, assisting businesses with project feasibility, financial modelling, debt-equity structuring, funding strategy, project reports, lender coordination and transaction support.

Our project finance services form part of our broader Corporate Finance Advisory Services, covering fundraising, valuation, M&A and strategic financial advisory.

What Is Project Finance?

Project finance is a financing structure generally used for large, capital-intensive projects where lenders evaluate the project’s future cash flows and ability to service debt.

Unlike conventional corporate borrowing, where lenders may primarily rely upon the overall balance sheet and creditworthiness of the borrower, project finance generally places greater emphasis on:

• projected project cash flows;
• economic and commercial viability;
• project assets;
• contractual arrangements;
• allocation of project risks;
• sponsor contribution;
• debt-servicing capacity; and
• security available to lenders.

A separate Special Purpose Vehicle (SPV) may be established to undertake the project.

For a detailed explanation of the concept, structure and participants, read our Guide to Project Finance in India.

When Is Project Finance Used?

Project financing may be considered where a business is undertaking a substantial investment requiring long-term capital.

It is commonly relevant for projects involving:

• infrastructure;
• renewable energy;
• solar and wind projects;
• power generation;
• manufacturing plants;
• industrial projects;
• roads and highways;
• logistics infrastructure;
• warehousing;
• healthcare infrastructure;
• hospitality projects;
• commercial infrastructure;
• waste-management projects;
• water and sanitation;
• transportation;
• technology infrastructure; and
• other capital-intensive projects.

The appropriate financing structure depends upon project economics, sponsor strength, sector, regulatory environment, contractual arrangements and lender appetite.

How Project Finance Differs from Corporate Finance

In traditional corporate finance, funding is generally raised based on the financial position, assets, cash flows and creditworthiness of the existing company.

In project finance, greater emphasis is placed upon the individual project’s:

• cash-flow-generating capacity;
• assets;
• contracts;
• economic viability;
• risk allocation; and
• repayment capability.

The financing may be structured through a separate SPV, particularly for large projects.

Project finance may therefore involve limited or structured recourse to project sponsors depending upon the financing arrangements agreed with lenders.

Businesses requiring broader financing, valuation or transaction advice can also review our Corporate Finance Advisory Services.

Our Project Finance Advisory Services

Our scope can be tailored according to the size, complexity and stage of the proposed project.

We may assist with the following areas.

Project Feasibility Assessment

Before approaching lenders or investors, the financial and commercial feasibility of the proposed project should be evaluated.

Our analysis may consider:

• total project cost;
• implementation period;
• projected capacity;
• expected revenue;
• operating costs;
• profitability;
• working-capital requirements;
• projected cash flows;
• debt-servicing capability;
• break-even point;
• return on investment;
• sponsor contribution; and
• key project risks.

The purpose is to determine whether the project assumptions provide a reasonable basis for approaching potential financiers.

Project Cost Assessment

Determining the total project cost is fundamental to the financing exercise.

Depending upon the project, costs may include:

• land;
• building and civil construction;
• plant and machinery;
• equipment;
• technology;
• infrastructure;
• installation;
• preliminary expenses;
• pre-operative expenses;
• interest during construction;
• contingencies;
• working capital; and
• other project-specific expenditure.

The project cost should be supported by reasonable estimates and aligned with the implementation plan.

Means of Finance

Once project cost has been determined, the proposed means of financing must be structured.

Funding may comprise a combination of:

• promoter contribution;
• equity capital;
• strategic-investor funding;
• term debt;
• bank finance;
• institutional borrowing;
• external commercial borrowing, where permissible;
• subordinate debt;
• unsecured funding; and
• other appropriate financing sources.

The optimum structure depends upon project cash flows, lender requirements, sponsor capability and applicable regulations.

Debt-Equity Structuring

An appropriate balance between debt and equity is important for project viability.

Excessive debt can place significant pressure on project cash flows, while excessive equity may reduce returns available to project sponsors.

Our analysis may consider:

• project cost;
• promoter contribution;
• debt requirement;
• repayment capability;
• interest cost;
• DSCR;
• leverage;
• expected returns;
• lender requirements; and
• sensitivity to changes in project performance.

The objective is to develop a financing structure that is commercially sustainable and suitable for discussion with potential lenders and investors.

Financial Modelling for Project Finance

A detailed financial model is central to a project-finance transaction.

The financial model converts business and project assumptions into projected financial results and cash flows.

Depending upon the assignment, the model may include:

• revenue projections;
• capacity utilisation;
• operating costs;
• EBITDA;
• depreciation;
• taxation;
• working capital;
• capital expenditure;
• interest;
• loan drawdown;
• debt repayment;
• cash flows;
• projected balance sheet;
• projected profit and loss account;
• DSCR;
• financial ratios; and
• returns to equity investors.

The model may also incorporate different scenarios to understand how changes in key assumptions affect project viability.

Cash-Flow Analysis

Project-finance lenders place significant emphasis on expected project cash flows because repayment of debt depends upon the project’s ability to generate adequate cash.

Cash-flow analysis may consider:

• operating cash inflows;
• operating expenses;
• working-capital movements;
• taxes;
• capital expenditure;
• interest;
• principal repayment;
• reserve requirements; and
• distributions to investors.

Cash-flow projections should be consistent with the project’s commercial assumptions and financing structure.

Debt Service Coverage Ratio – DSCR

DSCR is an important measure of a project’s ability to service its debt obligations.

It broadly compares the cash available for debt servicing with principal and interest obligations.

Project-finance analysis may consider:

• annual DSCR;
• average DSCR;
• minimum DSCR;
• repayment schedule;
• cash-flow fluctuations; and
• sensitivity of DSCR to changes in revenue, cost or interest assumptions.

The acceptable DSCR depends upon the lender, sector, project risk and financing structure.

Sensitivity and Scenario Analysis

Long-term projects are exposed to uncertainty.

Financial modelling should therefore consider how the project performs if key assumptions change.

Sensitivity analysis may evaluate the impact of:

• lower sales;
• lower capacity utilisation;
• project delays;
• higher construction cost;
• higher operating costs;
• higher interest rates;
• lower selling prices;
• foreign-exchange movements; and
• changes in working-capital requirements.

This helps sponsors and lenders understand the financial resilience of the proposed project.

Project Report and Detailed Financial Projections

Lenders may require a detailed project report explaining the business, project cost, funding requirement, market opportunity, implementation plan and financial projections.

Our assistance may include:

• preparation or review of project cost;
• means of finance;
• financial assumptions;
• projected profitability;
• projected balance sheet;
• cash-flow projections;
• DSCR;
• break-even analysis;
• ratio analysis; and
• lender-related financial information.

Businesses requiring a standalone bank-loan proposal can review our Project Report for Bank Loan service.

Funding Strategy

A project may have several potential sources of finance.

An appropriate funding strategy considers:

• amount of capital required;
• project stage;
• sponsor contribution;
• debt capacity;
• cost of finance;
• tenure;
• repayment profile;
• security requirements;
• dilution considerations; and
• regulatory restrictions.

Depending upon the project, funding may be sought from banks, financial institutions, investors or other eligible sources.

Debt Funding Advisory

Debt may form a substantial component of project financing.

Depending upon the engagement, our assistance may include:

• assessment of debt requirement;
• financial projections;
• lender information memorandum;
• financing structure;
• repayment analysis;
• DSCR analysis;
• project-report preparation;
• coordination of lender information requirements; and
• support during lender evaluation.

Loan sanction ultimately remains subject to the independent credit assessment and policies of the concerned lender.

Equity Funding and Sponsor Contribution

Projects may require substantial equity contribution before lenders are willing to commit debt funding.

Equity may be contributed by:

• promoters;
• strategic investors;
• financial investors;
• joint-venture partners;
• infrastructure funds; or
• other eligible investors.

Where the project requires broader investor fundraising or transaction advisory, our Corporate Finance Advisory Services may be relevant.

Project Finance for Foreign Investors in India

Foreign investors establishing or funding projects in India must consider India’s foreign-investment and foreign-exchange regulatory framework.

Depending upon the financing structure, issues may arise relating to:

• foreign direct investment;
• sectoral conditions;
• pricing guidelines;
• equity instruments;
• external commercial borrowings;
• downstream investment;
• reporting requirements;
• security creation; and
• repatriation.

Foreign investors may review our FEMA and RBI Advisory Services and India Market Entry Consulting Services for broader India-entry and regulatory assistance.

For current foreign-exchange regulations and directions, refer to the Reserve Bank of India.

External Commercial Borrowings for Projects

Eligible Indian entities may consider External Commercial Borrowings (ECB) as one potential source of foreign-currency or INR-denominated borrowing, subject to the applicable FEMA framework.

Relevant considerations may include:

• eligible borrower;
• recognised lender;
• permitted end use;
• minimum average maturity;
• all-in-cost requirements;
• reporting;
• hedging requirements, where applicable; and
• other conditions prescribed under the prevailing framework.

ECB should be evaluated as part of the overall funding structure rather than in isolation.

Official FEMA regulations and directions should be verified from the Reserve Bank of India.

Project Finance for Manufacturing Projects

Manufacturing projects may require finance for:

• land;
• factory building;
• plant and machinery;
• utilities;
• technology;
• installation;
• working capital; and
• capacity expansion.

Financial modelling may consider:

• installed capacity;
• capacity utilisation;
• production volume;
• raw-material costs;
• selling prices;
• labour;
• utilities;
• inventory;
• receivables; and
• operating margins.

Project Finance for Renewable Energy

Renewable-energy projects such as solar and wind projects may require substantial upfront investment followed by long-term operating cash flows.

Project evaluation may consider:

• project capacity;
• capital cost;
• implementation schedule;
• power-generation assumptions;
• tariffs;
• power-purchase arrangements;
• operating costs;
• debt tenure;
• interest;
• DSCR; and
• equity returns.

The financing structure should reflect the particular commercial and regulatory characteristics of the project.

Project Finance for Infrastructure Projects

Infrastructure projects often involve large capital expenditure and long implementation periods.

Such projects may require careful analysis of:

• project concession;
• construction risk;
• revenue model;
• demand;
• operating arrangements;
• government approvals;
• contractual obligations;
• project cash flows;
• financing tenure; and
• risk allocation.

The exact structure depends upon the nature of the infrastructure asset and contractual framework.

Project Agreements and Risk Allocation

Project-finance transactions may involve several important commercial agreements.

Depending upon the project, these can include:

• Engineering, Procurement and Construction (EPC) agreements;
• Operations and Maintenance (O&M) agreements;
• supply agreements;
• concession agreements;
• off-take agreements;
• power-purchase agreements;
• shareholder agreements; and
• financing documents.

The financial model should appropriately reflect the commercial terms of relevant agreements.

The existing page correctly identified EPC, O&M and input-supply arrangements as important project agreements; we are retaining that useful concept within the new commercial structure.

Off-Take and Revenue Arrangements

Lenders need reasonable visibility over the project’s ability to generate revenue.

Depending upon the sector, revenue may be supported by:

• long-term customer contracts;
• power-purchase agreements;
• concession arrangements;
• off-take agreements;
• usage charges;
• tariffs; or
• market-based sales.

The strength and predictability of the revenue model can materially affect project bankability and financing terms.

Project Implementation and Funding Drawdown

Project financing may involve funding being drawn progressively as the project is implemented.

The financing plan should therefore align:

• promoter contribution;
• equity infusion;
• debt drawdown;
• construction milestones;
• equipment payments;
• working-capital requirements; and
• expected commencement of operations.

A mismatch between funding availability and project expenditure can lead to delays and cost overruns.

Lender Coordination and Information Support

Project-finance transactions typically involve extensive information requirements.

Depending upon our engagement, we may assist management with:

• financial information;
• financial models;
• project reports;
• lender presentations;
• responses to financial queries;
• revised projections;
• sensitivity analysis;
• financial-ratio calculations; and
• coordination of information required during appraisal.

We work alongside management, lenders and other professional advisors as required.

Due Diligence in Project Finance

Lenders and investors may undertake financial, legal, technical, commercial, environmental and regulatory due diligence before committing funds.

Financial due diligence may involve reviewing:

• project assumptions;
• historical financial information;
• project cost;
• funding structure;
• related-party arrangements;
• financial projections;
• working capital;
• taxation;
• liabilities; and
• other financial risks.

For transaction-specific financial and commercial review, see our Due Diligence Advisory Services.

Business Valuation and Project Finance

Where equity investors participate in a project company, valuation considerations may arise in relation to:

• equity issuance;
• investor entry;
• strategic investment;
• shareholder transactions; or
• regulatory requirements.

Where an independent valuation is required, businesses can review our Business Valuation Services.

Project Finance and M&A

Project assets and project companies may also be acquired, sold or restructured.

Such transactions can require:

• financial due diligence;
• valuation;
• transaction structuring;
• financing;
• investor negotiations; and
• regulatory review.

For acquisition and transaction support, see our Mergers & Acquisitions Advisory Services.

Our Approach to Project Finance Advisory

Our project finance assignments generally follow a structured approach.

Understanding the Project

We understand:

• business model;
• project sector;
• promoter background;
• project cost;
• implementation plan;
• funding requirement;
• revenue model; and
• existing financial arrangements.

Financial Feasibility

We assess key financial assumptions and evaluate whether the project demonstrates reasonable financial viability.

Financial Modelling

We prepare or review projections covering profitability, cash flows, debt servicing and investor returns.

Financing Structure

We evaluate the proposed combination of promoter contribution, equity, debt and other funding sources.

Funding Documentation

Depending upon the scope, we assist with project reports, financial information, lender presentations and supporting schedules.

Lender and Investor Coordination

Where specifically included in our engagement, we assist management in coordinating financial information and responses required by prospective lenders or investors.

Transaction Support

We continue to assist with financial analysis and transaction coordination through the financing process according to the agreed scope.

Why Choose EzyBiz India for Project Finance Advisory?

Project finance requires the integration of financial modelling, taxation, regulatory understanding and corporate-finance experience.

EzyBiz India Consulting LLP provides integrated advisory support covering:

• project financial analysis;
• financial modelling;
• project reports;
• debt-equity structuring;
• fundraising;
• valuation;
• due diligence;
• taxation;
• FEMA and RBI matters;
• India-entry advisory; and
• ongoing finance support.

This integrated approach can be particularly useful for businesses and foreign investors undertaking projects in India.

Frequently Asked Questions

What is project finance?

Project finance is a financing approach generally used for large projects where lenders place significant reliance on the project’s expected cash flows, assets, contractual arrangements and ability to service debt.

What are Project Finance Advisory Services?

Project Finance Advisory Services assist project sponsors with financial feasibility, financial modelling, project-cost assessment, funding strategy, debt-equity structuring, project reports and financing-related coordination.

What types of projects can use project finance?

Project finance may be relevant for infrastructure, renewable energy, power, manufacturing, logistics, transportation, healthcare, hospitality and other capital-intensive projects.

Is an SPV compulsory for project finance?

An SPV is commonly used in project-finance structures, particularly for larger transactions, but the appropriate structure depends upon the particular project, financing arrangement and legal requirements.

What is limited-recourse project finance?

Limited-recourse financing generally means that lenders’ recourse to project sponsors is contractually limited, with repayment primarily dependent upon project cash flows and project assets, subject to the agreed financing structure.

What is DSCR in project finance?

DSCR measures the relationship between cash available for servicing debt and the project’s principal and interest obligations.

What is the usual debt-equity ratio for project finance?

There is no single ratio applicable to every project. The appropriate structure depends upon project economics, sector, lender requirements, sponsor strength, cash flows and risk profile.

Can EzyBiz prepare a financial model for project financing?

Yes. Depending upon the engagement, we can assist with financial projections, cash-flow modelling, debt schedules, DSCR, sensitivity analysis and other financial schedules.

Can EzyBiz prepare a project report for lenders?

Yes. We assist with project reports and financial projections. For standalone bank-loan proposals, see our Project Report for Bank Loan service.

Does EzyBiz guarantee project funding?

No. Funding decisions are made independently by banks, financial institutions and investors. No advisor can guarantee sanction or investment.

Can foreign investors finance Indian projects?

Foreign investment and foreign borrowing may be possible subject to the applicable FDI, FEMA, ECB and sector-specific requirements. The proposed structure should be reviewed before implementation.

Does EzyBiz assist with ECB?

Depending upon the engagement, we can assist with FEMA/RBI and transaction advisory aspects relating to eligible ECB structures. See our FEMA and RBI Advisory Services.

Related Services

• Corporate Finance Advisory Services
• Project Report for Bank Loan
• Project Finance in India – Complete Guide
• Business Valuation Services
• Due Diligence Advisory Services
• Mergers & Acquisitions Advisory Services
• FEMA and RBI Advisory Services
• India Market Entry Consulting Services

Prepared By:
EzyBiz India Consulting LLP
Chartered Accountants & Business Advisors

Last Updated:
August 2026

Disclaimer:
The information provided on this page is for general informational purposes only and should not be construed as investment, lending, legal, tax or regulatory advice. Project financing depends upon the financial viability of the project, lender or investor assessment, applicable laws and regulations, security requirements and commercial negotiations. Preparation of financial models, project reports or funding proposals does not guarantee sanction of finance or investment. Professional advice should be obtained based on the facts and circumstances of the specific project.