Project structuring.

What structuring decides

Structuring settles who owns the project, who carries each risk, how revenue reaches the people who funded it, and what happens if the arrangement fails. These decisions are made early, on limited information, and every later choice inherits them. Procurement, financing and negotiation all operate within the structure, and reopening it after a tender has been issued or a term sheet signed is expensive.

Our work is testing the proposed structure against what lenders will fund, what the tax and regulatory regime permits, and what the sponsors can realistically deliver, before any of it is committed to paper that binds.

Ownership and the project vehicle

Where the vehicle sits, who holds shares in it and on what terms determines tax treatment, the availability of political risk cover, and whether a development finance institution can invest at all. Shareholder arrangements set reserved matters, funding obligations, transfer restrictions and exit mechanics. Sponsors frequently defer these until the shareholders disagree, at which point the terms are negotiated under pressure.

Risk allocation

Construction, operating, resource, offtake, fuel supply, currency, change in law, political and force majeure risk each need to sit with a party able to manage or absorb them. The test is what comparable transactions in similar markets have actually cleared, not what the sponsor would prefer to transfer. An allocation the market rejects produces either no bids or a price that carries the rejected risk back as contingency.

Revenue and payment mechanism

How the project earns, from whom, in what currency, with what indexation and what happens when the counterparty pays late. Availability-based, volume-based, take-or-pay and merchant structures each shift risk differently, and the payment security package behind them usually matters more to a lender than the headline tariff.

Funding structure

Debt and equity proportions, the mix of commercial, development finance and export credit, concessional or blended elements where they apply, and the guarantees or cover that make the whole assembly work. We test the structure against the appetite that exists rather than the appetite a term sheet template assumes, which usually means talking to lenders during structuring rather than after it.

Bankability testing

Each structural decision is tested against the questions a lender will ask at credit committee. Where a proposed structure will not pass, saying so during structuring costs a conversation. Discovering it during due diligence costs months and, often, the terms.

Specialist and local advisers

Structuring depends on inputs we do not produce. Tax counsel on holding structure and treaty position, local counsel on the concession framework, land tenure and what the regulator has accepted in practice, and technical specialists where the delivery model turns on a physical question. We scope and coordinate them, and sequence their outputs so that the structure is settled on evidence rather than assumption.

Project structuring: common questions

When is a structure settled enough to proceed?

When the ownership, risk allocation, revenue mechanism and funding plan are consistent with one another and have been tested against lender and regulatory reality. Individual terms will still move in negotiation, but the shape should not.

Can a structure be changed after financing starts?

Yes, at a cost that rises steeply with time. Changes before a term sheet are routine. Changes after documentation has begun reopen credit approvals and the timetable, and every party will price the disruption.

Do you structure across multiple jurisdictions?

Yes. Cross-border projects add treaty position, currency convertibility, differing concession regimes and the question of which law governs which agreement. Each is resolved with local counsel in each jurisdiction rather than by analogy from one of them.

How does structuring relate to feasibility work?

Feasibility establishes whether the project works and at what cost. Structuring establishes how it is owned, delivered and paid for. On most assignments they run together, because a structure built on an untested cost base is not a structure.

Related expertise

• Project development
• Transaction advisory
• Contractual framework advisory
• Project finance advisory
• Feasibility studies