Analysis and reflection activity

Advantages of Project Finance

We have seen how Project finance has undoubted advantages as it allows undertaking projects whose indebtedness exceeds the company's capacity and, in addition, allows risks to be distributed among the different promoters that are involved in the project, thus avoiding the concentration of risks. However, they have two very interesting points to discuss. One is undeniable, its long-term duration, nobody would face the cost of a Project finance if they could use a commercial credit.

What do you think of the cost of financing, as it is directly proportional to the level of risk to be assumed by the financiers?

What does this mean and what consequences can it have?