PROJECT FINANCE: AN ANNOTATED BIBLIOGRAPHY
1. Ball, J. "Understanding the Mechanism." Euromoney, August 1988, S8 S10.
This article describes the concepts underlying and the mechanics of project financing. The concepts and mechanics are discussed from the perspectives of both borrowers and lenders. Project feasibility, as an example, must be evaluated by both borrower and lender. Regardless of what the numbers may promise on an assumption of success, the lender must determine that the underlying assumptions of success are themselves valid. Similarly, borrowers must assure themselves that a proposed project provides a high probability of goal attainment. Only after such initial evaluations are performed and yield the desired results, may considerations of the structure and specifics of a project loan be addressed by either borrower or lender.
2. The Banker. "Buybacks: Payment in Kind." The Banker, 141 (February 1991): 39.
This article describes a specific type of deal structure which is required by some countries for project finance arrangements. The buyback structure described in this article is most often associated with project finance in non industrial countries. The particular deal described in this article refers to a project within Iran.
The buyback arrangement is a form of countertrade. Countertrade is a generic term which refers to trade involving an element of reciprocity. Buy back arrangements are most often used in when producing facilities are sold to a country. The typical buy back arrangement requires that either the selling entity or the selling country agree to purchase specified volumes of the output from the production facility being sold. Selling prices for the products to be purchased by the seller or selling country are typically specified in buy back contracts. Lenders becoming involved in buyback deals must be prepared to provide support to industrial firms required to deal with pro...