Project Finance – Key Abbreviations (PART 1)
Here we have a selection of fundamental Abbreviations & Terms that are used in Project Finance on a regular basis.
1. SPV:
SPECIAL PURPOSE VEHICLE: A legal entity used to isolate project finance assets and liabilities.
2. PPP:
PUBLIC-PRIVATE PARTNERSHIP: A long-term partnership between public and private sectors.
3. CFADS:
CASH FLOW AVAILABLE FOR DEBT SERVICE: A measure of a project’s ability to repay debt.
4. DSCR:
DEBT SERVICE COVERAGE RATIO: A financial ratio used to assess a project’s ability to meet debt obligations.
5. DSRA:
DEBT SERVICE RESERVE ACCOUNT: An account used to ensure debt service obligations are met.
6. EPC:
ENGINEERING, PROCUREMENT, AND CONSTRUCTION: A contractual agreement for the design and construction of a project.
7. O&M:
OPERATION AND MAINTENANCE: The ongoing management of a project to ensure its continued operation.
8. OFFTAKER: The buyer of a project’s output.
9. PPA:
POWER PURCHASE AGREEMENT: A contract for the sale of a project’s output.
10. P50/P90: Probability measures used in estimating the expected value of a project.
See also this post for the video that explains it in more depth:
https://itoma.co.uk/2023/project-finance-key-glossary-terms-kpis-explained-in-10-minutes/
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