Building fundability into projects
For infrastructure projects moving from development toward serious capital engagement.
Developer readiness
Good projects can stall
A strong project can still stall when the case for capital is not yet clear. Commercial potential is real, but investors still need to understand how the project generates returns, where the risks sit and what has to happen before funding can move.
The constraint is often not capital itself, but the shortage of projects prepared to institutional standard. PPIAF and the World Bank emphasise bankability and project preparation, while AIIB and the OECD similarly point to investable pipelines, documentation and de-risking as material constraints.
For developers, the objective is not to make the project sound more attractive. It is to know what still needs to be solved, in what order, and whether the capital structure, risk allocation, evidence and project milestones support the proposition before it enters institutional review. That clarity should exist before serious counterparties are brought to the table.
Sponsor reality
The sponsor is part of the underwriting
Institutional underwriting extends beyond the asset. Capital providers also assess ownership, governance, alignment, financial capacity and the sponsor’s ability to execute.
Alignment
- Sponsor capital and risk retained
- Economic exposure next to capital
- Incentives aligned early on
Governance
- Ownership and control clearly defined
- Decision authority understood
- Conflicts and rights addressed
Capacity
- Funding obligations supportable
- Development milestones financeable
- Pre-close contingencies absorbable
Execution
- Relevant delivery track record
- Management know-how & capability
- Specialist support when required
Execution discipline
Specialist work should follow the decision path
Specialist advice should answer a specific capital question. We sequence legal, tax, technical and financial work around the decisions that move the case forward.
Scope the question
Define the unresolved issue before appointing the adviser, so the mandate is specific, proportionate and tied to a capital decision.
- Decision-critical questions first
- Adviser remit matched to unresolved issues
- Essential work separated from premature work
Sequence the spend
Commit development capital as the case earns the next stage, rather than funding every possible workstream before dependencies are clear.
- Specialist work tied to decision gates
- Cost committed as the case advances
- Dependencies resolved before workstreams multiply
Integrate the outputs
Carry specialist conclusions back into one sponsor position so the capital case is not weakened by contradictory assumptions or disconnected advice.
- Legal, tax, technical and financial inputs reconciled
- Conflicting assumptions identified early
- Outputs carried into the next capital decision