New RBI Grade B 2025 Notification will come Soon! Enroll Here

    Question

    Which of the following is a typical source of project

    finance?
    A Commercial banks Correct Answer Incorrect Answer
    B Stock markets Correct Answer Incorrect Answer
    C Private equity firms Correct Answer Incorrect Answer
    D Venture capitalists Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    Commercial banks are a typical source of project finance. Commercial banks provide debt financing to project sponsors in the form of long-term loans, which are typically secured by the project's assets and cash flows. Commercial banks are attracted to project finance transactions because they offer the potential for stable, long-term returns on investment. Project finance loans are often structured with a long repayment period that matches the expected life of the project, and the loan is repaid from the cash flows generated by the project.

    Practice Next

    Relevant for Exams: