International financing of investment business projects
APEX offers:• Financing of investments from €50 million and more• Minimization of the contribution of the project organizer• Investment loans for up to 20 years• Credit guarantees
Sector Finance APEX (France) offers financing for large investment business projects in Russia and the CIS, raising funds from sources with the most favourable terms.
✓ Project financing and investment consulting from APEX Investment Group:
• from €50 million and up;
• investments up to 90% of the project cost;
• loan repayment terms from 10 to 20 years;
To be considered for financing, we will send us a completed application form and a presentation of your project by email.
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Investments play a vital role in any business. They are a key factor in running a business, improving product quality, reducing costs, and ensuring the competitiveness of a modern enterprise. Apex Invest Consulting can impact the gross domestic product of entire countries, unemployment, and macroeconomic balance. Finally, investing in specific activities helps achieve economic growth. Investments in new, promising projects, such as solar power plants, wind farms, or waste-to-energy plants, provide investors with significant income and capital growth over time. A characteristic feature of any investment is an increased return, and the potential return on investment should be commensurate with the risk of the specific project. Investment success depends on many factors: economic conditions, efficient markets, access to capital, investment knowledge and skills, and much more. All other things being equal, knowledge and skills in identifying successful investment ideas, developing them, evaluating, and comparing investment alternatives are crucial. Financing investments for companies implementing large projects is a significant challenge today. Low-cost sources of financing are an important tool for ensuring the efficiency and quality of energy, infrastructure, environmental, and industrial projects across various economic sectors.
The French company APEX offers financing for investment projects in Russia and the CIS. We provide a wide range of services, including
financial modelling, obtaining loans and credits from major European banks on the most favourable terms, securing financing, and more. Our project financing schemes enable companies to implement large projects with a minimum contribution of 10%. Contact us to learn more.
Investment financing: principles and methods
The nature of the project and the conditions of its implementation determine the choice of instruments and sources of investment financing. External sources of financing can be private or public partners. The state usually provides funds for the implementation of socially significant projects from the national and local budgets.
The most frequently used sources of financing are bank loans and loans provided by international financial institutions, syndicated loans, bonds, hybrid securities and others. Partners can be banks, corporate and private investors, international financial institutions and others. Grants provided by European funds and international programs are also an important source of long-term financing for projects in the EU.
Factors influencing the decision to choose financing:• Risks. It is important to distribute responsibility for the success or failure of the project.• Financing as a package of services. The provision of comprehensive services related to the allocation of money, construction, supply of equipment and operation of a new facility can be carried out by one large company.• Benefits for the financier. Lending includes interest payments. If investors finance a specific project, they expect a certain return.• The appropriate timing for financing in terms of the project life cycle.• The level of technical readiness of the companies participating in the project. Investment financing is based on several basic principles, including the principle of division of powers, the principle of equality of parties, the principle of additional financing, the principle of reasonable concentration of financial resources, and others. We suggest considering these principles in more detail.
Table: Basic principles of investment financing.
| Basic principles | Brief description |
| Separation of competencies | Investment financing must be carried out based on general criteria, formal requirements and restrictions that are the same for all interested parties. |
| Equality of the parties | Investment financing must be carried out on the basis of general criteria, formal requirements and restrictions that are the same for all interested parties. |
| Additional funding | When providing financial resources, a requirement for additional funding to support project implementation is observed in practice. This requirement provides ample scope for providing additional funds should unforeseen obstacles arise. |
| Reasonable concentration of financial resources | The investment project that is deemed the most suitable in terms of financing usually has priority over other projects for accelerated completion and commissioning. |
There are also various classifications of investment financing sources. Depending on their origin, funds are classified as internal or external (from banks,
investment funds, or other partners). Based on their organisational structure, all financing sources can be divided into centralised and decentralised. In most cases, large energy and infrastructure projects are financed on a mixed basis from various sources.
Main sources of financing for investment projects
Instruments of external financing of investment projects are widely used at different stages of development.
In a broad sense, they are divided into several large groups:• Debt financing.• Equity financing.• Public financing.
Debt financing is a flexible and quite attractive method of providing part or all of the necessary financial resources for the implementation of projects. Debt financing is allocated through resources collected in financial markets, such as bank loans,
syndicated loans, and bond issues. Examples of large global financial institutions engaged in financing investment projects are
JPMorgan Chase,
Goldman Sachs and
Deutsche Bank . Our company closely cooperates with reputable banks in Spain and other EU countries to provide you with the best financing terms for each project.
Table: types of debt financing of investments.
| Financing | Advantages | Flaws |
| Secured bank loan | Easy to obtain with collateral. The company retains ownership of its assets and all profits from the business. Attractive when the risk of bankruptcy is assessed as low. | Without suitable collateral, implementation is impossible. There is a risk of asset loss. Hidden expenses often accompany these transactions, increasing the cost of funds. Banks do not share any of the company’s financial risks. |
| Unsecured loan from relatives or friends | An attractive option when the risk of failure of a particular investment project is assessed as low. | Not applicable to large projects. Family and friends may feel pressure, which will impact personal relationships. |
| Leasing | The overall costs are significantly higher than those of many other investment financing methods. | The overall costs are significantly higher than many other investment financing methods. |
| Crowdfunding | Easily reaches investors, especially for small, promising projects. | Professional assistance is required to raise the full amount. This concept limits the number of potential investors. A powerful information campaign is required. |
| Bonds | It’s easy to obtain financing if you have assets. Possibility of obtaining lower interest rates than banks. Issuing bonds extends the financial cycle. | Achieving low enough interest rates requires a large amount of money. |
Investment project financing is based on several principles, such as profitability, maturity, solvency, security, and the loan’s intended purpose. Loan documentation includes an agreement setting out the basic terms (loan cost, loan term, use of funds, repayment, guarantees, measures in the event of default by the parties, etc.).Various loan classifications exist, and their application varies from case to case. Depending on the scale of investment projects, we distinguish between
short-term and
long-term loans. Short-term loans are used to cover expenses during project approval, to raise funds for full financing (usually before the design stage), or to implement specific project stages. Long-term loans, typically provided by international financial institutions, are typically granted to governments or backed by government guarantees. Syndicated bank lending is common due to the high cost of some projects. Depending on the nature of the project, loans may be provided unsecured or with limited collateral. The obligations of the parties typically depend on the stage of the investment project being financed. During the construction phase, when costs are highest and the project is not yet generating cash flows, the risk for lenders is high. Guarantees for the performance of obligations, including those provided by third parties, are typically required. In some cases, guarantees may be waived during the operational phase, when revenue is generated.
Bonds are a typical debt instrument for investment financing. Bonds are long-term securities issued by governments, local authorities, banks, financial institutions, and companies. Bonds are a form of long-term borrowing used by the issuer. Bonds can be issued with a fixed or floating interest rate, which is accrued on the par value of the bond. Each bond carries the risk of default, which is the inability to collect interest and principal. The fundamental parameters determining the adequacy of bond financing are the scale and useful life of the project, the cost of financing, and the repayment profile. These parameters must be compared with those of bank lending to determine the most suitable investment financing for a particular project. Bonds are an alternative source of investment financing. They are particularly suitable for large, multi-billion-dollar projects for which the banking sector does not offer sufficient liquidity.
Several energy, environmental, and infrastructure projects are financed through bonds, with timely interest and principal payments guaranteed by insurance companies. The primary role of insurance companies is to provide credit guarantees to bondholders. As a result of this guarantee, bonds receive a high credit rating, which reduces the cost of funds for businesses. An attractive feature of the bond market is the availability of financing with long-term financial interests. This not only makes it cheaper than bank financing but also allows for an extension of the project’s debt maturity, which, in turn, significantly improves the project’s economic performance. On the other hand, bond financing also has a number of disadvantages. Bondholders have certain powers, although they may not have control over issues such as significant changes to the project schedule, documentation, etc. The entire amount is released to the investor upon approval of the project contract and accompanying documentation. In some cases, the latter condition does not satisfy the recipient. Regardless of the financial instruments used, debt financing for investment projects offers a number of advantages. It enables the rapid launch of large projects with robust financial plans and shifts some of the debt burden to future users of the products or services. The disadvantages of debt financing for investments must also be considered.
One of these is the long interest payment period, which can reach 15 years or more. In this case, the business’s flexibility in responding to changing economic conditions, political priorities, revenue levels, and other factors is extremely limited.
Equity financing involves the sale of a company’s stake or shares. The owners of the company forfeit a portion of the business in exchange for financing its operations.
Table: Types of Equity Financing for Investments.
| Financing | Advantages | Flaws |
| Own resources / internal financing | A good source of funding for companies with sufficient profitability. The owners’ accumulated equity is used to finance the project. | If a business fails, not only the company but also some of the owners go bankrupt. |
| Strategic (corporate) investor | Such an investor possesses know-how, business contacts, and market knowledge. The recipient of the funding can dramatically improve the business’s key performance indicators. | Risk of losing control of the business. Complex process. Slower implementation of new developments and business expansion into new markets. |
| Business angels | Know-how and professional experience. This type of financing is most suitable for early-stage businesses, so the experience of business angels is an added advantage. Business angels can attract other investors or a strategic partner. | Finding a business angel can be time-consuming. This type of investor invests in projects with promising prospects. At some point in the business, the recipient may have disagreements with the investor. |
| Venture capital | An optimal source of financing for medium-sized investments of several million euros. Financial risk is shared. An easy choice for new, promising companies. | Venture capital funds seek out early-stage companies. Due diligence is required. Venture capital funds are experienced in increasing the value of their investments. Some funds have a narrow focus and an early exit strategy. |
Benefits of project financing for business
In developed countries, project finance is widely used to implement large investment projects. This option for financing long-term projects (
energy, transport, environment), as well as public service projects, is based on an unsecured financial model with debt repayment due to future cash flows of the project.
Project finance offers investors, lenders and other participants the opportunity and means to distribute costs, benefits and risks in an economically feasible manner by selecting and applying specific financial instruments used for a strictly defined purpose.
The positive characteristics of project finance, which distinguish it from traditional investment financing, can be summarised as follows:• The investor finances the entire project, focusing on the cash flows after the start of operation of the completed facility, and not on the existing assets of the project initiator.• Project finance is based on a contractual framework including several interrelated agreements with third parties (suppliers, customers and government agencies), which is essential for the provision of funds.• The return on funds is guaranteed by the revenues from the operation of the facility in accordance with the terms of the signed contracts, excluding the value of the assets of the project itself.• Project investors rely on a well-thought-out contractual framework, which should guarantee the minimisation of risks and uncertainty. Project financing also has certain disadvantages associated with complex and time-consuming processes for developing a financial package and the high costs associated with these activities. This model is also characterised by numerous risks arising from a large number of contractual relationships. Project financing is associated with high interest rates and debt servicing fees, as well as additional regulatory procedures with varying impacts on the investment project.
ESFC, an international company, can act as your financial partner in the implementation of large projects in Russia, the CIS, and abroad. We are ready to provide investment financing on optimal terms, as well as a full range of
consulting and engineering services at any stage of the project.