Financing of Projects and Adquisitions

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Financing for projects with long amortisation terms

Project & Acquisition Finance is an alternative aimed at financing large projects that require a high initial investment. Other features of these projects are the long repayment periods, which depend on the rate of cash flow generation, the returns they generate in the long term.

Project Finance is an investment financing mechanism, normally channelled through a vehicle company. Debt repayment is based on the project's ability to generate positive cash flows, and not on the creditworthiness of the promoting partners or the value of the project's physical assets.

Therefore, the closing of these operations will depend on the predictability and stability of the project's cash flows. Similarly, the risk must be directly monitored once the financing process has been signed.

To close a Project Finance operation, Banco Santander will make an exhaustive project risk analysis and contracts will be signed in which the responsibilities of the parties will be defined. The completion of the operation requires a Due Diligence process or reports from independent advisers in the economic, technical, legal or environmental fields, as well as detailed analyses of the sector in question, to examine the viability of the project.

Whether your company is an SME or a large company, you can send us your project for evaluation. The construction of wind power plants, solar thermal plants, hotels, offices, highways, car parks are some examples of investments financed through Project Finance.

Banco Santander has market shares above 18% for both Project Finance and Structured Finance. In 2019 the Bank closed more than 47 project and operations financing operations assuming the role of MLA or Bookrunner.

How to arrange this financing

If your company needs access to financing, go to your nearest Santander office.

Shall we discuss it?

If you would like more information, visit any of our branch offices.

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Minimise costs and risks and maximise the value of the project

Using the Santander Project and Acquisition Financing service has a number of advantages:

Secure financing of the project: it allows companies to undertake large investments that, due to the size of their balance sheet, would not be possible otherwise.
Minimise cost: it can provide a high leverage and maximise the value of the project.
Minimise the impact of financing with regard to the promoting partners: it reduces the risks assumed by the partners, since no financial guarantees are required from the promoters. A detailed analysis of the project allows the risks to be assigned among the different participants. Once assigned, the dependency between the project and its promoters is solely operational, not financial.
It does not consolidate debt (in certain circumstances): It allows the design of legal and corporate schemes that avoid the consolidation of the project's debt in the partners' balance sheets.
It does not deteriorate the rating of the partners.
It does not affect debt capacity, which allows partners to allocate funds to other projects that, due to their structure, are not capable of being financed through Project Finance.

Shall we discuss it?

If you would like more information, visit any of our branch offices.

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Most common queries

How is Project Finance different from traditional financing products?

The main differences with respect to traditional financing products reside in the limited recourse to shareholders, in which the design of the repayment profile is based on the project's ability to generate cash, the higher degree of leverage and the longer term of these types of operations.

What types of assets are eligible for financing?

Basically assets that show great predictability and stability of cash flows. Assets and sectors likely to be financed in Project Finance format are:

Infrastructures (highways, tunnels, ...)
Telecommunications (cable, antennas ...)
Energy, water and waste treatment (hydraulics, wind power, conventional generation, purification ...)
Real Estate (office buildings, car parks, hotels, shopping centres ...)
Hospitals

What are the main criteria used to analyse the viability of an operation?

The analysis is based on the project's ability to generate sufficient cash to meet the costs derived from operating the business, make the necessary investments for the proper maintenance of the asset and deal with the service of the debt designed in the financial model in terms of solvency.

Shall we discuss it?

If you would like more information, visit any of our branch offices.

FIND A BRANCH OFFICE