Project Finance

Abstract

Numerous studies claim to have ‘documented’ the existence historically of project finance loans. If correct, this would make limited recourse structures among the oldest forms of debt known. However, as discussed in Chapter 1, a clear distinction has to be made between limited recourse loans, where repayment depends uniquely upon the cash flow generated by a single, self-liquidating investment, from other ventures comprised of a single project only. Limited recourse loans are a well-defined form of borrowing; any transaction that fails to include all of the elements unique to this structure cannot qualify as project finance. On this basis, it is arguable whether the historic record produces a single, unambiguous example of a limited recourse loan in the sense used here.