Project bond

A tradable debt investment in which an investor loans money to the private partner for a defined period of time at a variable or fixed interest rate for the development of a project.
Project bond financing is a common option for countries with developed and deep capital markets, but it is usually applied as a re-financing solution (through “bridge to bonds” loans) and not as financing mechanism for construction. It provides access to wider resources for long-term finance, usually enjoying longer debt terms, but is a less flexible financial solution (as funds may not be usually drawn down progressively). Furthermore, varying the terms during the life of the PPP is more difficult.

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