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date: 25 February 2020

Abstract and Keywords

This article aims to identify the essential elements of a project finance deal. It examines this issue from the standpoint of a sponsoring enterprise that has to assess the feasibility of the deal from the financial point of view with the help of its financial advisor. The term “financial advisor” often refers to banks that act as mandated lead arrangers in syndicated loans. Reviewing project finance from the project sponsor standpoint means we will be able to assess the advantages offered by this technique compared to traditional corporate debt. This approach also enables us to see how deals are structured and what conditions make them bankable for creditors (banks or bondholders).

Keywords: project finance, financial advisor, corporate debt, creditors, bondholders, project sponsor

Stefano Gatti

Stefano Gatti is director of the BSc of economics and finance at Bocconi University in Milan, where he's also past director of the International Teachers' Program. His main area of research is corporate finance and investment banking. He has published in these areas, including recent publications in Financial Management, the Journal of Money, Credit and Banking, the Journal of Banking and Finance, and the European Journal of Operational Research. Professor Gatti has published a variety of texts on banking areas and has acted as a consultant to several financial and non-financial institutions and for the Italian Ministry of the Economy. He received the prize as the best MBA teacher during the period 2004–2010 and the prize for excellence in research in 2009–2011. He is financial advisor of the Pension Fund of Health Care Professions and former member of the board of directors of BCC Private Equity SGR and Same Deutz Fahr Group.

Stefano Caselli

Stefano Caselli, PhD, is a full professor of banking and finance at Bocconi University, where he directs the master of science in finance and the master in international management for CEMS. He is the director of Executive Education Custom Programs, Banks and Financial Institutions Division, at SDA Bocconi. He specializes in corporate finance, with specific attention to private equity and venture capital, and small and family firms financing. He's the author of several books, such as Private Equity and Venture Capital in Europe with Elsevier Academic Press. He has published extensively, with recent papers in the Journal of Banking and Finance, European Financial Management, and The Journal of Financial Services Research. He is a consultant for banks and nonfinancial institutions in Italy and abroad.

Alessandro Steffanoni

Alessandro Steffanoni is the head of project finance at Meliorbanca Spa (Banca Popular dell'Emilia Romagna Group). A former officer at General Electric Interbanca and Banca Intesa, he teaches project and structured finance at SDA Bocconi School of Management. He's the author of recent publications in the Journal of Money, Credit and Banking and Financial Management.

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