Importance of Financing in Project Planning

This article discusses principal areas relevant to financing natural resource projects using as an example a hypothetical newly proposed direct reduction facility. The issues most directly affecting the project from the standpoint of financing are categorized in four groups: 1. Lenders' differing requirements with respect to projected cashflows; 2. The impact of leveraging on project viability; 3. The importance of appropriate debt structure; 4. The significance of accurate and complete capital cost estimates. The findings emphasize that the economics and the financing of a project are not only inseparable, but that they should also be viewed as directly interactive during the project planning process.