Project Finance
We advise on complex, capital-intensive projects, leveraging experience in reclamation and PPP deals to navigate regulatory hurdles and secure bank approvals.
We’d be glad to learn more about your company and discuss the best ways we can help.
Project Finance is a long-term financing method used to fund major infrastructure and energy projects in the Philippines, such as toll roads, airports, power plants, water utilities, and transport terminals.
In this structure, loans are repaid using the future cash flow generated by the project itself, not from the project sponsor’s main business or assets.
Project Finance requires setting up of a Special Purpose Vehicle (SPV) entity and involves multiple stakeholders including sponsors, banks, government agencies, and off-takers (buyers of the project output).
The project finance borrower is an SPV created specifically to own and operate the project.Lenders rely on limited or non-recourse arrangements. Repayment is tied to the project’s revenue, not the sponsor’s overall credit.In the Philippines, project finance is commonly used to fund large-scale projects like PPPs (Public-Private Partnerships), local government infrastructure, and renewable energy developments.A strong off-take agreement (e.g., Power Purchase Agreements for energy) and financial strength of the sponsors (e.g. sufficient equity infusion and guarantees) are essential for bank approval.Due diligence is rigorous, requiring legal, technical, environmental, and financial review from third-party experts.Government approvals (such as ECC from DENR, DOE endorsement, or NEDA ICC review) often play a role in early stages.
Access to large-scale funding – Ideal for projects that require PHP 500 million or more in long-term capital.
Risk containment for sponsors – Project risk is isolated through the SPV; this protects the sponsor’s balance sheet.
Attractive to local banks and DFIs – Strong infrastructure projects attract both Philippine banks and multilateral lenders (e.g., ADB, IFC).
Custom structuring – Financing terms are tailored to match project construction timelines and ramp-up periods.
Support for national development – Project Finance enables developers to contribute to the country’s economic growth while accessing sustainable capital.
- Longer lead times – Project Finance deals can take 6–12 months to reach financial close due to their complexity.
- High setup costs – Engaging advisors and consultants is necessary to meet lender requirements and ensure bankability.
- Reliance on off-take contracts – Lenders assess the financial strength and contractual terms of the off-taker very carefully.
- Need for government coordination – Especially for infrastructure, coordination with LGUs and regulatory bodies is required.
- Sponsor equity and guarantees – Lenders may ask for cost overrun support, equity injections, or completion guarantees from the spons
Project Finance is a powerful option for Philippine developers looking to build large-scale infrastructure or energy projects. It offers long-term, sustainable funding, provided that the project is well-structured, has a clear revenue model, and strong contractual support.
At Bayfront Capital Advisors, we help project sponsors navigate the complexities of structuring project finance transactions in the Philippines. From SPV setup to bank syndication, our team works with developers, contractors, and government agencies to bring long-term capital to transformative projects across the country.
Interested in a debt or M&A transaction? Connect with us through the form below.