Multi-Source Project Finance Consulting: Structuring Capital Stacks with Precision

Multi-source project finance involves raising capital from a mix of debt, equity, quasi-equity, grants, and guarantees to fund large-scale infrastructure, energy, industrial or logistics ventures. As sponsors face rising construction costs, tightening credit, and geopolitical complexity, a single-source approach is rarely sufficient. Coordinated capital stacking—across banks, DFIs, export credit agencies (ECAs), mezz funds, and private investors—has become essential.

This guide outlines how Financely supports clients with multi-source structuring, from early-stage modeling to lender syndication, commercial close, and disbursement tracking. If your transaction is above $10 million and cross-border, this guide is for you.

1. What Is Multi-Source Project Finance?

Multi-source project finance refers to the use of several capital providers to fund a single transaction. Each layer in the stack serves a function—risk allocation, tenor extension, cost minimization, or coverage of specific funding gaps. Common sources include:

• Senior Loans – From commercial banks, DFIs, or ECAs.
• Mezzanine Debt – Often privately placed, subordinated to senior but above equity.
• Equity – From sponsors, institutional investors, or development capital funds.
• Grants/Subsidies – From climate funds, sovereign aid programs, or international donors.
• Credit Enhancements – PRI wraps, SBLCs, or sovereign guarantees.

2. When Multi-Source Financing Is Required

• Total project costs exceed what a single lender is willing to fund or take on balance sheet.
• Project requires long tenors (15–25 years) not offered by commercial banks alone.
• Sponsor seeks to de-risk construction by mobilizing different classes of capital.
• Host-country risk or limited FX convertibility caps conventional lender appetite.
• Project qualifies for green funding, concessional finance, or sovereign-linked support.

3. Financely’s Advisory Process

We act as lead financial advisor, assisting sponsors in designing, executing, and closing multi-layered financing structures. Our scope typically covers:

• Feasibility modeling and cash flow structuring (DSCR, LLCR, equity IRR).
• Capital stack design—optimizing debt-to-equity ratios, mezz buffers, and grant leverage.
• Investor and lender engagement—syndication strategy and deal marketing.
• Term sheet negotiation, covenant alignment, and intercreditor mechanics.
• Coordination of legal, technical, environmental, and insurance due diligence.

4. Types of Capital We Structure

4.1 Senior Secured Loans

• Long-term amortising debt backed by project cash flows and collateral.
• Typical providers: DFIs, ECAs, commercial banks, ESG-focused funds.
• Tenor: 5 to 18 years, depending on sector and jurisdiction.

4.2 Mezzanine Debt

• Subordinated loans or convertible instruments used to fill funding gaps.
• Higher yield; often includes equity kickers or warrants.
• Used where equity dilution is unattractive but senior limits are reached.

4.3 Equity and Development Capital

• Risk-bearing capital from sponsors, private equity funds, or DFIs.
• Financely helps match projects with equity investors aligned with exit timelines.
• Special focus on energy transition, industrial, logistics and mining sponsors.

4.4 Export Credit and Concessional Finance

• Funding or guarantees tied to equipment sourced from specific countries (e.g. UKEF, Bpifrance, US EXIM).
• Often combined with commercial tranches under a blended structure.
• Concessional elements may include grace periods, lower interest, or grant-like top-ups.

4.5 Guarantees and Wraps

• Political Risk Insurance (PRI), MIGA guarantees, or full-wrap insurance from private underwriters.
• Used to attract senior lenders where regulatory or sovereign risks are high.
• Enhances credit rating, expands tenor, or allows local currency funding.

5. Designing a Bankable Capital Stack

Structuring the right stack involves balancing cost, control, risk-sharing, and regulatory requirements. Key metrics include:

• DSCR – Debt Service Coverage Ratio must remain above 1.2–1.5 across base/downside cases.
• LLCR – Loan Life Coverage Ratio to satisfy long-tenor lenders.
• Debt-to-Equity Ratio – Typically 60:40 or 70:30, adjusted based on jurisdiction and asset class.
• Cash Waterfall – Defines priority of payments across tranches.
• Intercreditor Agreement – Clarifies rights, enforcement priorities, and standstill periods.

6. Sector Focus and Experience

• Energy – Utility-scale solar, onshore wind, battery storage, hybrid grids, and IPP platforms.
• Transport & Logistics – Ports, terminals, warehousing, rail and last-mile infrastructure.
• Industrial & Agri-Processing – Fertilizer, cement, metal processing, food transformation hubs.
• Water & Waste – Desalination, wastewater treatment, municipal waste-to-energy.
• Mining & Battery Metals – Copper, lithium, manganese, graphite projects with long-term off-takes.

7. Sample Deal Structures Financely Supports

Example 1 – Solar PV + Battery (Africa)

• Senior loan: DFI + commercial bank syndicate (USD 45M)
• Mezzanine: Clean energy fund (USD 10M)
• Equity: Sponsor + strategic LP (USD 25M)
• PRI Wrap: MIGA for political coverage

Example 2 – Copper Processing Plant (South America)

• Senior loan: ECA-tied to equipment from Spain and Germany (EUR 70M)
• Equity: Mining sponsor + US fund (EUR 40M)
• Bridge loan: Local bank for construction phase (EUR 15M)
• Offtake-linked repayment waterfall with step-in rights

Example 3 – Logistics Hub (Gulf Region)

• Senior secured loan: UAE and EU lenders (USD 60M)
• Subordinated debt: Industrial conglomerate in exchange for preferred returns (USD 12M)
• Municipal land contributed as equity-in-kind (USD 18M equivalent)

8. Financely’s Advantages in Multi-Source Structuring

• Lean expert team: ex-investment bankers and capital markets professionals.
• Access to over 350+ credit providers globally—private funds, DFIs, banks, insurers.
• Track record in cross-border mandates and hard-to-finance jurisdictions.
• Hands-on financial modeling, risk analysis, and commercial negotiation support.
• Transparent retainer-based model. No hidden fees. No guarantee scams.

9. What We Need to Engage

• Investor deck and capex summary.
• Financial model (or at least key assumptions).
• Preliminary land rights, permits, or licences (if applicable).
• Management bios and prior experience.
• Preferred debt/equity mix and jurisdictional exposure.

10. What You Get Working With Us

• Term sheet-ready structure that makes sense to banks, DFIs and funds.
• Introductions to qualified capital providers—no time wasters.
• Support in model refinement, lender Q&A, and information disclosure.
• Coordination of all counterparties to get to commercial close.
• Clarity on timelines, fees, and steps—no bait-and-switch.

Ready to Structure Your Capital Stack?

If your project is real, above $10 million, and you need a team that can structure and execute multi-source funding with professionalism and speed, talk to us.

Request a Project Finance Consultation

Financely acts as an advisory platform. All capital arrangements are subject to lender underwriting, regulatory compliance, and sponsor due diligence. Financely does not issue guarantees or accept crypto or third-party payments.