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Project finance—Export Credit Agencies, multilateral lenders and development finance institutions

Project finance—Export Credit Agencies, multilateral lenders and development finance institutions Projects are typically financed on a limited recourse basis through one or more sources, including: • government contributions • senior debt provided by commercial lenders and/or funds, and • equity provided by project sponsors However, in certain jurisdictions, senior debt provided by commercial lenders and/or funds may be difficult to obtain due to the limitations on local liquidity and/or actual or perceived local political risks (see Practice Note: Project risks and risk allocation—Legal and political risk in a project finance transaction). This funding gap in developing markets may be bridged by funding provided by institutional lenders, such as Export Credit Agencies (ECAs) and multilateral or bilateral (national) Development Finance Institutions (DFIs). Alternatively, lenders providing senior debt may be supported by an ECA or DFI by means of a guarantee or other form of insurance cover. Typically, ECAs are involved in projects abroad to promote their national industries in the context of international trade, for example, where a national...