Many project failures resulting from unplanned, untimely and insufficient financing, mainly attributable to commencement of implementation before making adequate funding and disbursement arrangements.
Sources of financing differ for the various public, joint and private sector project enterprises. Some of the sources available to the public sector are not available to the private sector, while some others available to the private sector are not available'to the public sector.
The main sources of project finance are as follows :
Equity and Preference Share Capital
- Promoter group's contribution
- State Government contribution
- Public subscription
- Speed capital assistance
- Risk Capital and Technology Finance corporation Ltd.'s assistance.
- Technology Development and Information Company of India's assistance
- Share subscription by financial institutions and mutual funds
- Share subscription by NRIs
- Employees stock exchange.
- Preference shares or Preferred stock
- Central and state capital subsidies, sales tax loan and development assistance
Internal generation of funds
- Retained profit
- Depreciation
Lease financing
Public Sector Bonds
Debentures
Long-term rupee loans
- From all-India development banks and investment institutions
- Sundry sources of long-term loans
- Inter-corporate loans
Central Government budgetary support
Foreign Currency Funds
- Free foreign exchange from EF dealers and loans from development banks
External commercial borrowings
External aid
- Bilateral aid
- Multilateral aid
Assistance from International Finance Corporation
Investment from Oil Exporting Developing Countries (OEDCs)
Collaborator's equity participation in foreign exchange
Share subscription by overseas investors
NRI and OCB Share subscription in foreign exchange
Short term rupee funds for working capital
- From commercial banks
- Public deposits
- Suppliers' credits
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