Project Financing

Project finance is the use of non-recourse or limited-recourse financial structures to finance long-term infrastructure, industrial projects, and public services projects. Debt and equity used to finance the project are repaid from the cash flow generated by the project.

One of the main advantages of project finance is that it provides off-balance sheet financing from the project. This does not jeopardize the creditworthiness of shareholders or contracting authorities and shifts some of the project risk to the lender, resulting in a higher return margin for the lender.

Demaco Investment Group provides project financing services to investors and project sponsors for projects in countries not subject to international sanctions by the United Kingdom, the USA and Canada.

Project Fund Arrangers & Preliminary Review

Demaco Investment Group works with a group of international lenders who are able to finance infrastructure and commercial projects on favorable and competitive terms.

We provide project financing services to project owners, sponsors, developers and investors for projects in aviation, architecture, energy, marine, transportation, agriculture, infrastructure, telecommunications, hospitality & tourism, water resources and renewables.

Since risk allocation and management serve as a key to project financing, DIG and its financing partners require a vigorous analysis of your project before financing commitments are laid out.

We will need an executive summary, a thorough business plan, financial projections for the next five to ten years, a management resume and sponsor(s) background, and a project development or construction budget before we can consider financing your project.

We advise that you give us a thorough breakdown of the net cash requirements from beginning to conclusion, along with the repayment /exit timeline and mechanism.

Project Finance Network:

In order to provide companies, sponsors and developers with access to project financing, we engage the services of our network of financial and strategic partners including; accounting, taxation, ESG, economic and financial modelling teams as well as accredited investors including pension funds, insurance companies, private equity, private investors, sovereign wealth trusts, infrastructure agencies, development banks and syndicates.

Project Stakeholder Engagement:

Demaco Investment Group collaborates with governments, project sponsors, regulators and other stakeholders on policies, reforms and regulations aiding infrastructure financing. We provide financial advice on how to develop profitable project portfolios, work with development banks and infrastructure institutions to strengthen institutional capacity, design investment vehicles, credit enhancement tools, and provide advisory and financial advice across multiple infrastructure sectors.

Project Finance Modeling:

Project sponsors seeking investors, lenders, or other interested parties should approach these potential project participants by presenting us with an offer convincing enough to risk betting large sums of money by investing in their projects. This means that project sponsors must demonstrate that their investment in their project will provide a return on investment that is enough to allow investors to risk their capital.

Many of the proposed investments relate to the acquisition of assets that are already in operation and already generating demonstrable income, such as companies, commercial apartment buildings or industrial facilities.

Project financing involves asset development, so there are no provable operating assets. Due to unconfirmed income, expenses and cash flows, project sponsors should base their proposals on projections to potential equity investors and lenders. Project sponsors are able to make this possible with a financial model and a well-crafted and compelling business plan.

A project financial model is a sophisticated computer spreadsheet that uses long lists of business assumptions and variables to develop financial projections of cost of capital, revenues, expenses, cash flows, and future asset values.

Because the financial model forms almost the entire basis of an investment or loan for a proposed project, it should be based on reasonable, valid, and transparent assumptions and variables that reflect the expected real-world interactions between data and estimates. The financial model must be capable of sensitivity analysis, which calculates a forecast based on the range of variation in the data. It must also demonstrate future returns and ROI sufficient to convince investors and lenders to invest in your project.

Project Types:

Demaco Investment Group is interested in global projects that seek project financing in the following areas:

• Infrastructure: (airports, seaports, telecoms, toll gates / highways, Rail, cargo terminals, housing estates, hospitals, shopping centers)
• Energy: (oil & gas, LNG projects, power generation, transmission & distribution)
• Green Energy: (solar, wind, biofuel, biomass, geothermal, hydro power, energy storage, natural gas, carbon emission control projects, environmental social and governance projects, sustainable real estate)
• Technology
• Hospitality (leisure, tourism, hotels, themed entertainment)

Project Locations:

We will only finance projects in countries friendly to Canada, USA and UK and/or countries where the United States, United Kingdom and Canada are not subject to international sanctions.

Key Networks & Resources:

1. Global Private Investors & Lenders
2. Pension Funds & Sovereign Trusts
3. Banks & Insurance Companies
4. Global Engineering, Procurement and Construction (EPC) companies
5. Operations and Maintenance (O&M) Firms

Project Funding:

• Minimum project loan size of $5Million USD up to $6Billion USD
• Loan term: from 10 to 25 years; Grace period: 12-24 months
• Financing up to 80-90% of the project investment cost.
• Remaining minimum of 10-20% provided by the project sponsor and may take the form of cost of feasibility study by a credible third party, acquisition of land, licenses, permits, etc.
• Our project lenders require the project sponsors to have a skin in the game.

Upfront Fees:
We do not charge upfront fees or any hidden fees for project financing. However, we earn a success fee of 1% to 3% of the total gross loan amount for the project finance loan arrangements, determined primarily by the loan size, type of transaction and other factors. We only get paid if our clients are successful in obtaining loans from the lenders or investors we introduce.

Structuring Costs:
Please note that it is common practice in project finance for the project company to bear all due diligence costs, including but not limited to the following:

• Professional reports
• Valuation appraisals
• Legal fee
• Technical fee
• Tax Services
• Structuring Work
• “Out of pocket” Expenses

These fees are paid directly to the lender as part of the initial costs and are non-refundable expenses incurred by the lender.

In the traditional banking industry, the funds already spent by the project company/sponsor to prepare for the project commencement (e.g., acquisition of land, permits, licenses, other assets) should be taken into account by the bank and classified as an equity contribution or down payment towards the project sponsor’s funding. However, the borrower is still expected to bear other related costs.

Project Finance Request:

Preliminary Application for Project Financing

We know that completing and submitting a project funding request can be tedious and time consuming. In addition, a project funding request, including a complete application form, can take hours to complete.

Demaco Investment Group strives to make your application for project finance as quick and easy as possible. To save you time and expedite the deal approval process, we’ve developed this online Project Funding Request form that only takes minutes to submit. The online request form is essentially a preliminary project funding application that can be submitted quickly and can be processed and approved within 2-8 days.
After preliminary approval, you will be contacted to submit all application documents.

All loans are subject to the lender’s eligibility requirements, underwriting policies, additional terms and approvals. Each lender requires specific supporting documentation for each new application.

Personal credit scores are not considered. Instead, lenders focus on the merits and feasibility of the project. We also consider the background of the sponsor and the type of collateral (offtake agreement, SBLC, bank guarantee, sovereign guarantee, ISPO, land, property, etc.).

Thank you, in advance as we look forward to doing business together for many years to come.