What Does a Project Finance Consultant Do?

Article 1 In order to promote the healthy development of project financing business of banking financial institutions and effectively manage project financing risks, the Banking Supervision and Administration Law of the People's Republic of China, the Law of the People's Republic of China on Commercial Banks, and the Interim Measures for the Management of Fixed Assets Loans And other relevant laws and regulations to formulate these guidelines.

Project Finance Business Guidelines

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Article 1 To promote the healthy development and effective management of project financing business of banking financial institutions

Agencies, departments, banking regulatory bureaus, policy banks, state-owned commercial banks,

In order to strengthen the risk management of the project financing business and promote the healthy development of the project financing business, the CBRC has formulated the "Guide to the Project Financing Business", which is now issued to you, please follow it.

Please ask the CBRC to forward this notice to

Article 1 In order to promote the healthy development of project financing business of banking financial institutions and effectively manage project financing risks, the Banking Supervision and Administration Law of the People's Republic of China, the Law of the People's Republic of China on Commercial Banks, and the Interim Measures for the Management of Fixed Asset Loans And other relevant laws and regulations to formulate these guidelines.

Article 2 These guidelines are applicable to banking financing institutions (hereinafter referred to as lenders) established in the People's Republic of China with the approval of the banking regulatory agency of the State Council for project financing.

Article 3 The term "project financing" as mentioned in these Guidelines refers to loans that meet the following characteristics:

(1) The purpose of the loan is usually to construct a large production unit or a group of production facilities, infrastructure, real estate projects or other projects, including refinancing of projects under construction or construction;

(2) The borrower is usually an enterprise or enterprise legal person specially formed for the construction, operation or financing of the project, including an existing enterprise or enterprise legal person mainly engaged in the construction, operation or financing of the project;

(3) The source of repayment funds mainly depends on the sales income, subsidy income or other income generated by the project, and generally does not have other sources of repayment.

Article 4 Lenders engaging in project financing business shall have the ability to identify and manage the risks of the projects they engage in, be equipped with professionals required for business development, and establish a sound operational process and risk management mechanism.

The lender may, as required, entrust or require the borrower to entrust an independent intermediary agency with relevant qualifications to provide professional advice or services in the fields of law, taxation, insurance, technology, environmental protection and supervision.

Article 5 The projects provided by the lender for project financing shall comply with relevant national policies on industry, land, environmental protection, and investment management.

Article 6 Lenders engaged in project financing business shall fully identify and evaluate the construction period risks and operating period risks in financing projects, including policy risks, financing risks, completion risks, product market risks, overrun risks, raw material risks, and operational risks. , Exchange rate risks, environmental risks and other related risks.

Article 7 Lenders engaged in project financing business should focus on debt solvency analysis, and focus on assessing project risks from the aspects of project technical feasibility, financial feasibility, and reliability of repayment sources, and fully consider policy changes and market fluctuations. Determine the impact of the factors on the project, and carefully predict the future income and cash flow of the project.

Article 8 The lender shall reasonably determine the loan amount in accordance with the relevant provisions of the state on the capital system of fixed asset investment projects, taking into account factors such as project risk levels and its own risk tolerance.

Article 9 The lender shall reasonably determine the loan term and repayment plan based on factors such as projected cash flow and investment payback period.

Article 10 Lenders shall, in accordance with the relevant provisions of the People's Bank of China on interest rate management, and in accordance with the principle of risk-return matching, comprehensively consider factors such as project risks and risk mitigation measures to reasonably determine loan interest rates.

Lenders can use different loan interest rates based on the risk characteristics and levels of project financing at different stages.

Article 11 The lender shall require that the project assets and / or project expected returns and other rights that meet the pledge conditions are set as guarantees for the loan, and may, if necessary, pledge the equity of the project company held by the project sponsor for the loan. guarantee.

The lender shall require to be the first claimant for insurance premiums for the commercial insurance insured by the project, or take other measures to effectively control the insurance claims and benefits.

Article 12 Lenders shall take measures to effectively reduce and diversify various risks of financing projects during the construction and operation periods.

The lender shall minimize the risk during the construction period by requiring the borrower or the relevant parties of the project through the borrower to sign a general contract, insure commercial insurance, establish a completion guarantee, provide a completion guarantee and a performance guarantee.

Lenders can effectively diversify risks during the operating period by requiring borrowers to sign long-term supply and marketing contracts, using financial derivatives, or providing sponsors with funding gap guarantees.

Article 13 Lenders can provide financial advisory services for projects, design comprehensive financial service solutions for projects, use a variety of financing tools in combination, broaden the source of project funding channels, and effectively diversify risks.

Article 14 Lenders shall properly design project financing contract terms such as account management, loan fund payments, borrower commitments, financial indicator control, and major breaches in accordance with the relevant provisions of the Interim Measures for the Management of Fixed Assets Loans to promote the normal construction of projects And operations to effectively control project financing risks.

Article 15 The lender shall issue loan funds in accordance with the actual progress of the project and funding requirements, and in accordance with the terms agreed in the contract. Before the loan is disbursed, the lender shall confirm that the project capital in the same proportion as the loan to be disbursed is in place and used in conjunction with the loan.

Article 16 The lender shall implement the management and control of the payment of loan funds in accordance with the relevant provisions of the Interim Measures on the Management of Fixed Assets Loans for the issuance and payment of loans, and may, when necessary, agree with the borrower in the loan contract to provide a special loan release Account.

In the case of the lender's entrusted payment method, the lender may require the borrower, independent intermediary agency, and contractor to jointly inspect the progress of equipment construction or project construction when necessary, and make a loan based on a common visa issued and meeting the conditions agreed in the contract. Pay.

Article 17 The lender shall agree with the borrower on a special project income account, and require all project income to enter the agreed account and make external payments in accordance with the conditions and methods agreed in advance.

The lender shall perform dynamic monitoring of the project income account, and when abnormalities occur in the fund flow of the account, it shall promptly identify the cause and take corresponding measures.

Article 18 During the duration of the loan, the lender shall continuously monitor the construction and operation of the project, evaluate the project risks on a regular basis based on factors such as loan guarantees, market environment, and macroeconomic changes, and establish a loan quality monitoring system and risk early warning. system. In the event of a situation that may affect the security of the loan, corresponding measures shall be taken in a timely manner.

Article 19 Where multiple banking financial institutions participate in the same project financing, in principle, a syndicated loan method shall be adopted.

Article 20 Loans issued in accordance with the characteristics of project financing for projects such as cultural creativity and new technology development shall be implemented with reference to these Guidelines.

Article 21 The interpretation of these guidelines is the responsibility of the China Banking Regulatory Commission.

Article 22 These Guidelines shall be implemented three months after the date of issuance.