ABSTRACT
This chapter discusses an uncommon form of project financing. This form of project financing is called limited recourse financing. Full recourse project financing can impact a company's debt capacity just as much as corporate financing. When American corporations began to finance overseas projects by borrowing at the project level, many were able to arrange non-recourse financing by arranging loans without any recourse to themselves, with lenders looking solely to the cash flow and assets of the project. Syndication risk is the risk of obtaining the financing after the basic terms and conditions have been negotiated with a lender or lenders. The opportunities to pass certain risks to lenders will vary from project to project. The basic categories of project risk are: participant; completion; raw material supply; production; market; force majeure; foreign exchange; political; and abandonment. Financing with intermediate-term debt instead of long-term debt can lead to a large amount falling due at maturity.
