credit analysis policies in construction project strongfinancestrong.pdfVIP

Management Marketing (2009) Vol. 4, No. 2, pp. 79-94. CREDIT ANALYSIS POLICIES IN CONSTRUCTION PROJECT FINANCE Andra–Maria VASILESCU, Alina Mihaela DIMA, Simona VASILACHE Academy of Economic Studies, Bucharest Abstract. This paper aims to illustrate a revolutionary approach to bank financing of extensive investment projects developed by major corporations. The new approach pertains to corporate banking and is applied to corporate projects developed by special purpose vehicles. The theoretical framework highlights general aspects of project finance and of construction projects management in general, with special focus on residential constructions. The second part adds to the theoretical structure the exampl e of a project finance policy implemented by a Romanian subsidiary of a foreign bank and places the emphasis on the credit analysis in case of residential construction projects. The final objective of the paper is to bridge the corporate banking field with project finance, regarded as a banking field of its own, in line with the vision of the bank subject to this article. Keywords: credit analysis, project finance, banking institutions. 1. Project finance overview 1.1. Determinants of project finance Construction projects are complex human endeavours that entail extensive planning and tight control if they are to be successful. In any industry and in any country of the Globe, they have always posed difficult challenges to the project teams and project stakeholders, challenges such as: costs overrun, delays in project delivery, quality control and profitability. Overriding costs are especially risky since they can trigger a whole array of new problems, such as delays in project delivery, the