Project Finance for Geothermal Power Projects

Abstract

The Export-Import Bank of Japan (J-EXIM) has facilities such as export credit, investment credit, untied loan and untied guarantee, for supporting geothermal power projects.

Traditionally, J-EXIM has secured its credits by obtaining Japanese suppliers or investors guarantees, guarantees from first class banks both domestic or international, or sovereign guarantees, in support of projects in developing countries. However, J-EXIM can provide project finance for projects on a case by case basis.

There is no strict definition of project fiancÈ however it may be defined as follows: A financing of a particular economic unit in which a lender is satisfied to look initially to the cash flows and earning of that economic unit as the source of funds from which a loans will be repaid and to the assets of the economic init as collateral for the loan.

Project finance techniques are used for a wide range of projects. It is applied to natural resource development, manufacturing and infrastructure projects. Large-scale infrastructure projects such as power, transportation and telecommunication are increasing especially in south East Asia. BOT (Build Operate Transfer) structure is often used for these projects.

Project finance can be applied to geothermal power projects.