Fri | Aug 18, 2017

Banking experts see viable projects as catalyst for development

Published:Friday | March 31, 2017 | 3:00 AM

Some regional banking experts agree that while the atmosphere is ideal for infrastructural development in the region to boom, continued viability of projects is of utmost importance.

This was the conclusion of discussions at the recent two-day regional Infrastructure Conference, hosted by the Development Bank of Jamaica at the Jamaica Pegasus hotel in New Kingston. Held under the theme 'Delivering Economic Growth through Partnership: Private Sector Participating in Infrastructural development', the event hosted a panel which explored bankability and key points in closing financing.

The event included lenders' who got an opportunity to share, from their perspectives as debt financiers, key steps towards closing the financing, drawdown of funds and ensuring a project remains compliant with lenders' requirements. The segment also included discussions on various sources of debt financing while exploring protections lenders seek to mitigate against project failure or risks.

Moderated by Vanessa Rizzioli, director of UK-based Cranwicke Consulting, the panel included Stefan Wright, senior investment officer, Inter-American Development Bank, Jamaica; Gregory Hill, managing director, ANSA Merchant Bank Limited, Barbados; and Stanley Thompson, manager of organisation and structuring, NCB Capital Markets Limited.

Defining bankability as the "conditions that lenders will look for to feel secure that they will be repaid for monies that are invested into a project, Rizzoli noted that there was no shortage of capital in the region as lenders are increasingly able to pick up loan portfolios and public-private partnership and privatisation projects as this asset class becomes more familiar.

However, Thompson noted that while there are opportunities for funding and project development, "projects are only efficient if developed in a manner that allows all partners to experience adequate levels of satisfaction, alongside to outside financiers." This, he said, can be achieved with the proper due diligence and renegotiation, should this become necessary.

He noted that unlike popular belief, lenders like the NCB Group are open to discussion.