What does project funding mean for PNG?
Infrastructure development constitutes the majority of effort being invested by the PNG government to improve the quality of life for PNG residents. As a rapidly developing country PNG's rate of growth currently exceeds its capacity to independently fund all of the projects it needs to undertake simultaneously.
This isn't to say that PNG isn't capable of funding the required works. On the contrary PNG is one of the richest countries in the modern world in terms of its available natural resources, all of which are in high demand. As an indicator of economic growth PNG's Gross Domestic Product [GDP] continues to increase steadily, coming from 0.57% in 2004 to 7.03% in 2010.
The challenge facing PNG is to manage growth in a sustainable way that meets the demand for exports. To do this infrastructure development that improves internal trade alongside international trade is required to ensure the prosperity is assured for all Papua New Guineans.
How does Sierra Fleet Services assist with the funding of essential projects?
Sierra Fleet Services maintains a strong network of banks, venture capitalists and inter government agencies who all understand the value of funding worthy infrastructure development projects. Through this network we are able to arrange for equipment purchases and working capital, which is needed to get many projects off the ground and to a productive phase capable of recovering seed or startup capital.
Our network can accommodate short and long cash cycles, by assessing each project on its merits. A key factor in calculating the cash cycle to be adopted is to understand the period of time when working capital is not available for use in other projects.
Assessment for funding of project finance and the cash cycle to be adopted is therefore dependent upon the projected cash flows of the project rather than the balance sheets of the project sponsors. This may involve a number of equity investors and/or a syndicate of banks or other lenders from our network.
How is project funding typically secured?
Security can be varied for financing each project. The loans are most commonly non-recourse loans, which are secured by the project assets and paid entirely from project cash flow, rather than from the general assets of the project sponsors. This includes the revenue-producing contracts developed by the project. Creditworthiness is still a requirement of funding. In a typical situation a lien on all of the project assets will also be taken for the term of the cash cycle.
If you would like to know more about how Sierra Fleet Services can assist you with project funding please contact us.
Note to project sponsors
All of the information contained herein is for general information only and does not expressly guarantee or imply funding of any project. A standard funding application must be completed and this must satisfy the requirements of our network lenders before any funding approvals are given.