Meridian can arrange project finance to address the unique requirements of turnkey installations, technology transfers, infrastructure programs, franchise operations, maintenance contracts, and other kinds of international projects when there is full recourse to a creditworthy borrower, guarantor, or some other source of repayment.
While similar to trade finance in terms of credit underwriting, full-recourse project finance comes together most effectively when the lender understands the project’s design, planning, and execution. Beyond expertise in trade finance, Meridian has considerable project management experience and possesses the skills to facilitate communication between engineering and financing participants in project-focused trade transactions.
Project finance is much more challenging to arrange when the only source of repayment will be the revenue stream, cash flows, cost savings, or equity position generated by the project itself and there is limited recourse—or none at all—to the project’s sponsors.
The scope of work extends well beyond what’s required to arrange financing for trade transactions. Turnaround times are much longer and projects can fail to go the distance no matter how effectively the financing has been arranged. While we’re confident of the contribution we can make toward a project’s success, Meridian will get involved with arranging non-recourse project finance only on a mandated basis and with payment of a retainer.
The first step is to determine whether project finance is even required. When exporters contact Meridian to inquire about “project finance,” sometimes they just mean their foreign customer is seeking payment terms for a somewhat technical trade transaction. While the contract may have some project-like elements, with a little restructuring the transaction might be eligible for straightforward trade finance . . . with a lower cost and much faster turnaround time.
Project finance often requires political risk insurance coverage to protect against confiscation, expropriation, nationalization (CEN), political violence (PV), and currency inconvertibility (CI) or transfer risks.
Meridian specializes in brokering political risk insurance, for private-sector projects in high-risk markets or public-sector projects with a foreign government as the obligor or guarantor.