The first step in the project finance process is the main sponsor initiating the start of the project. This is often the government and they'll run an auction process. Once the auction process is complete. We know the underlying sponsors of the project, one of whom may well be the government. At this point there's usually a main financial advisor who's appointed as part of the overall sponsor group. They will first establish a special purpose vehicle, a legal entity that will go on to raise money, build, and potentially operate the project. The financial advisor will start by producing an information memorandum, which will describe the project. It'll give some suggested financial guidelines for the financing and potentially give some indicative cash flows for the project. It'll also cover all the different risks they perceive the project to have. Once this is done, other financial and legal advisors are appointed.

Once that's been completed, typically a feasibility or pilot study is started. If it's an oil well, they could do some drilling. There may be some R&D. It could be a management consultancy who does work to prove whether the project is feasible. At this point, all title, the leases and permits and any other contracts which are required for the project to start, need to be confirmed. Once that's done, the subscriptions for equity financing, debt financing, and the construction will start finally, after the construction phase, the project becomes operational.