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What is an essential consideration for a project to be suitable for project finance?
  • a)
    Large scale of investment above $100 million.
  • b)
    Predictable and contractually guaranteed revenues.
  • c)
    High profitability in the first year of operation.
  • d)
    A well-established form of ownership.
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
What is an essential consideration for a project to be suitable for pr...
A project suitable for project finance should have predictable and contractually guaranteed revenues. This means that the project's earnings and expenses should be foreseeable and supported by solid contracts, such as power purchase agreements (PPAs) or off-take agreements. This predictability helps ensure that the project can generate sufficient cash flows to cover its obligations.
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What is an essential consideration for a project to be suitable for project finance?a)Large scale of investment above $100 million.b)Predictable and contractually guaranteed revenues.c)High profitability in the first year of operation.d)A well-established form of ownership.Correct answer is option 'B'. Can you explain this answer?
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