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Current Trends in Financing International Resource Projects

Jonathan R. Rod, International Resources Law: Today's Oil, Gas, and Mining Projects (1997)

For many years the financing of international resource projects had been accomplished primarily through a limited number of means. Large, well-capitalized companies individually or jointly would develop a project using their own balance sheets as the primary source of funding. Alternatively, these same companies would form some type of special-purpose company to obtain a portion of the required funding from banks or multilateral or export credit agencies. Often, the sponsors would provide guarantees for all or a portion of the funding required for these projects. As project financing techniques have become more accepted they have been adapted and become prevalent in the development of a myriad of natural resource projects.

Today creative hybrid structures merging project finance and structured finance techniques with a heavy reliance on the issuance of securities in the United States capital markets, are being utilized to finance a large number of natural resource projects worldwide.