Project finance

The rating of a Project finance considers the credit risk associated with the financing of a project or infrastructure, traditionally instrumented through a 'Special Purpose Vehicle' (SPV) that limits recourse to the sponsor. Therefore, the debtor's main collateral is made up of the asset itself and its ability to generate adequate cash flows in line with those expected according to a highly reliable estimates based on an expert assessment.

The rating is generally based on an assessment of the technical, regulatory and financial risks of the project, all of which are also influenced by ESG considerations in the development of its activity. In summary, the very conception of the project within its technology and location, its contractual framework and other parties involved to provide the expected returns, as well as its ability to be remunerated by a counterparty of adequate solvency under a scenario of limited risk in regards to potential deviations that may impact its ability to meet financial commitments are key elements covered by our rating methodology for Project finance.