PROJECT FINANCING

Project Financing refers to a specialized form of capital investment provided by banks, financial institutions, or private investors for funding large-scale projects. The repayment of such financing is structured in a way that it primarily comes from the future cash flows generated by the project itself, rather than solely relying on the general assets or creditworthiness of the borrower. This type of financing is widely used in sectors such as infrastructure development, renewable energy projects, manufacturing plants, industrial parks, hospitality, healthcare facilities, IT parks, and real estate projects.

Key Features of Project Financing

  • The first and most important step is to clearly define the purpose and objectives of the NGO.
  • Objectives may include areas such as education, health, women empowerment, poverty alleviation, environmental sustainability, animal welfare, etc.
  • These objectives form the foundation of the NGO's mission and vision and must be well-articulated in its legal documentation.
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  • The founders or promoters of the NGO must form a Board of Trustees, Managing Committee, or Board of Directors depending on the type of NGO structure.
  • These members will be responsible for governance, compliance, financial oversight, and strategic direction.
  • Minimum number of members required varies by law:
    • Trust – Minimum 2 trustees
    • Society – Minimum 7 members
    • Section 8 Company – Minimum 2 directors (private) / 3 (public)
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  • The name of the NGO should be unique, socially appropriate, and not violate the Emblems and Names (Prevention of Improper Use) Act, 1950.
  • In case of Section 8 Company, name availability must be verified through the MCA portal and ROC approval is mandatory.
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  • Legal drafting must be done carefully and professionally. The legal documents will define:
    • Vision and mission
    • Governance structure
    • Powers and responsibilities of board members
    • Mode of functioning and meetings
    • Dissolution clause
  • Documents required based on type of NGO:
    • Trust – Trust Deed
    • Society – Memorandum of Association (MoA) and Rules & Regulations
    • Section 8 Company – MoA, Articles of Association (AoA), and other incorporation documents

Areas of Practice – Our Firm’s Expertise

Our firm provides comprehensive consultancy and advisory services in the domain of project financing, assisting clients throughout the lifecycle of funding. Our services include:

Covering technical feasibility, financial projections, risk analysis, and expected returns.

Liaising with banks, NBFCs, and international investors to secure structured funding.

Facilitating venture capital, private equity, or strategic investments.

Ensuring legal due diligence, adherence to RBI/SEBI/FEMA norms, and drafting loan agreements, security documents, and escrow arrangements.

Advisory on restructuring existing debt, refinancing at favorable terms, and optimizing capital structure.

Advisory for infrastructure projects, renewable energy, manufacturing units, healthcare & education projects, and technology-driven ventures.