INTEREST RATE FOR PROJECT FINANCING
At present, interest rate limits on ECB for project financing (i.e. to say non-recourse financing) allow
interest spreads above LIBOR/US Treasury to be higher than for normal ECB. Keeping market conditions in mind, some flexibility will be permitted in determining the spread on merits. In order to give
borrowers greater flexibility in designing a debt strategy, upto 50% of the permissible debt may be
allowed in the form of sub-ordinated debt at a higher interest rate, provided the composite spread for
senior and sub-ordinated debt taken together comes within the overall project financing limit.
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