One of the most common mistakes early-stage developers make is approaching financiers the way they would approach a business pitch — leading with the vision, the market size, and the team. In project finance, that approach will get you politely shown the door.
Lenders and infrastructure investors are not evaluating your vision. They are evaluating risk. Specifically, they are asking: in what scenarios does this project not generate enough cash to repay us, and how likely are those scenarios?
Think like a lender
Before you walk into any financing conversation, train yourself to see your project the way a lender sees it. For every element of your project, the lender is asking:
- Revenue risk — is there a contracted, creditworthy customer? What happens if they default or the contract is terminated?
- Construction risk — who bears the cost if construction runs over budget or over time? Is the contractor experienced and financially capable?
- Operating risk — what happens if the facility underperforms? Who is the operator and what track record do they have?
- Political and regulatory risk — could government action affect the project's revenue or operations? Is there political risk insurance?
- Currency risk — if revenue is in local currency but debt is in USD, what happens when the currency weakens?
Contracts are everything
In project finance, a project is fundamentally a bundle of contracts. The value of your project is determined almost entirely by the quality and completeness of those contracts. A verbal agreement with a potential customer is worth nothing. A signed, bankable offtake agreement with a creditworthy counterparty is worth a great deal.
This is why experienced developers invest heavily in legal and commercial documentation early. Every contract you sign — with your offtaker, your EPC contractor, your operator, your land owner — reduces a risk and increases your project's bankability.
The financial model is your story in numbers
Lenders will build their own financial model of your project. But they expect you to present one first — and they will test it hard. A good project finance model:
- Shows the project's cash flows over its full operational life (typically 20–25 years)
- Demonstrates that the DSCR remains above 1.2x throughout the debt period, even under stress scenarios
- Shows the equity returns clearly, so equity investors can assess whether the risk-return profile is attractive
- Is built on conservative, justifiable assumptions — not optimistic projections
Timing matters
Approaching lenders too early — before you have a signed offtake agreement, clear land rights, and a credible contractor — is a mistake that damages your credibility and wastes everyone's time. Most experienced developers approach financing institutions informally first (to understand requirements and test appetite) and formally only when the project is substantially de-risked.
tayari's assessment is designed to help you understand exactly where you are in that de-risking journey — and what gaps to address before you engage.