When the key stakeholders of the project are raising capital both to equity holders and debt holders, they'll need an information memorandum. They'll also need to use one to attract the best quality reputable financial advisors and accountants.

They'll need to write an information memorandum, and it's worth explaining the kinds of things that will go into that document.

There will be a project overview, just describing exactly what's going to be done, what's gonna be built, and how it'll operate in high level summary.

In addition to that, there will be a fairly detailed operational and in particular, financial plan with things like forecast, cash flows, and an income statement of what they can expect the project to generate going forward.

Costs are very, very important and there will be a lot of work breaking down the costs of developing the project. One of the big risks is that the project can get delayed in the construction phase, and this will do two things. It will increase the cost of construction and it will delay the revenue that can be expected. Once the project is complete.

There will be an estimate of the capitalization required to fund the project. Usually an indication of how much debt and how much equity will need to go into the project.

Key are the people involved in the project, ownership structure, and key sponsors involved in the project will be documented. It's really important to have a high quality institutions and firms involved because that's more likely to help pull investors in. So in many cases, the financial advisors, the accountants, the legal representation, when they put their name on the project, they're acting almost as a quality stamp for that project.

There's going to be a detailed description of the management team, and we normally expect a fairly good level of experience and competence.

We'll also want to know where we're going to sell the product or service. So not only will you describe the output, but also where you expect to sell it. So if it's an oil refinery, where do you expect to sell the processed oil? Also, the strategies and critically the different competitors that you'll be competing with. So in the case of Euro Tunnel, it was ferry companies and airlines that the tunnel would be competing with.

In some projects, the technology can be more important than others. So in the example we used Euro tunnel technology was obviously a very important part of it because they were building a tunnel underneath the sea. So where that's the case, there will be a detailed description of the technology and the production and the construction process Process. In some projects, the availability of supplies and the prices can be very, very important. So if it's an oil refinery, you'll need to think very carefully about where you're gonna get your feed stock, or if it's an electricity generator where you're going to get your input like gas, that's going to run the generators.

Contracts are very important in project finance and all the different types of contracts will need to be summarized in the information memorandum. So the key terms of the contracts, and that could be supply contracts, construction contracts, engineering contracts, procurement contracts, sales contracts, all those things will need to be described in the information memorandum. There will be a host of other things like the insurance required for the project and the environmental considerations, which can be very important. For example, where there's possibility of things like oil spills or construction in environmentally sensitive area. There'll be other commercial and in particular sometimes political risks, and investors will wanna see all of those risks discussed and identified. So one of the biggest things here is to make sure you have the risk identified and if possible, where you have transferred that risk away from the special purpose vehicle.