Project Financing insights from visionary CFO’s

A challenge faced by many CFOs is the long-term financing of infrastructure and industrial projects based upon the projected cash flows of the project rather than the balance sheets of the company. Since a project financing structure often involves a number of different equity investors, as well as a ‘syndicate’ of banks or other lending institutions that provide loans to the operation, a critical element is the financial modeling to support the success of the project.

CFO’s are often required to demonstrate increased control over the business from their finance function whilst at the same time reducing costs, yet be visibly adding value to the business, both through processes and it’s people. CFO’s are finding greater cost pressures from inside their organisation and dealing with these pressures has meant that the more visionary CFO’s have transformed the finance function to be more creative and resourceful, especially when undertaking new project financing and the associated financial modelling and strategies. They are turning to highly skilled and experienced financial experts to assist with project financing. This means that CFO’s are able to have increased output whilst saving costs – maximum output affordable investment with managed risk.

“We have found that more and more CFO’s are leaning towards using part-time or interim finance resources to consult on new or proposed project financing assignments. These outsourced finance individuals have many years of experience behind them in a variety of industries and are able to bring valuable insights to the table,” comments Richard Angus, CEO of The Finance Team.

Outsourced financial executives bring many skills to the table. They are able to supply insightful business intelligence through up to date understanding of compliance and control, reporting procedure, operational efficiency and insights. These outsourced resources keep pace with changing environmental issues such as regulatory efficiencies, reporting, tax legislation, lending procedures, forecasting and profitability.

“Outsourced financial executives have a wealth of experience and knowledge; therefore, they are able to assist the CFO with integrated planning strategies, accurate forecasts as well as qualitative and quantitative analysis of the financial data. They are able to do this on a project basis thereby limiting expenditure and minimising risk as these resources are not employed full time. It is advisable however, when engaging a part-time or interim finance resource, to ensure that they are reputable and have references that can be checked. The alternative is to engage the services of a company that provides trusted part-time or interim finance resources. Their associates will have undergone a strict and thorough screening process before they are permitted to join the team. Your success is their success,” concludes Richard.

(Image Credit: IFR)