Overview of Project Finance

Session 1 Outline
• Brief Introduction to concept of Project
• Definition of Project
• Characteristics of a Project
• Classification of a Project
• Project Selection Process
• Project Finance Introduction
• What is Project Finance - Definitions
• Participants in Project Finance
• Comparison of Project finance with wholesale banking finance products
 INTRODUCTION
• Projects have a major role to play in the economic
development of a country
• Since the introduction of planning in our economy, we have
been investing large amount of money in projects related to
industry, minerals, power, transportation, irrigation,
education etc. with a view to improve the socio-economic
conditions of the people
• These projects are designed with the aim of efficient
management, earning adequate return to provide for future
development with their own resources
 CONCEPT OF PROJECT AND PROJECT
MANAGEMENT
• The term project has a wider meaning.
• A project is accomplished by performing a set of activities.
• For example, construction of a house is a project.
• The construction of a house consists of many activities like
digging of foundation pits, construction of foundation,
construction of walls, construction of roof, fixing of doors
and windows, fixing of sanitary fitting, wiring etc
CONCEPT OF PROJECT AND PROJECT
MANAGEMENT
• Each project is unique in the sense that the activities of a
project are unique and non routine.
• A project consumes resources
• The resources required for completing a project are men,
material, money and time.
• Thus, we can define a project as an organized programme of
pre determined group of activities that are non-routine in
nature and that must be completed using the available
resources within the given time limit.
 Project Definition contd.
• Project management institute, USA defined
project as “a system involving the co-ordination
of a number of separate department entities
throughout organization, in a way it must be
completed with prescribed schedules and time
constraints”.
Project Definition
• Let us now consider some definitions of ‘project’.
• Newman et. al define that “a project typically has a distinct mission that it
is designed to achieve and a clear termination point the achievement of the
mission”.
• Gillinger defines “project” as the whole complex of activities involved in
using resources to gain benefits.
• PMBOK (Project Management Body of Knowledge) defines project as a
temporary endeavour undertaken to create a unique product or service.
• Temporary means that every project has a definite end, and Unique means
that the product or service is different from all similar products or services.
Project Definition contd.
• Turner defines projects as an endeavor in which human (or
machine), materials, financial and knowledge resources are
organized in a novel way, to undertake a unique scope of
work of given specification, within constraints of cost and
time, so as to deliver quantitative, qualitative, and consumer
oriented product and service
• Bridgefield group defines project as a related set of activities
and milestones with a preset goal and time frame that is
designed as a specific event and not an ongoing process.
Important aspects of a project
Following are the important aspects of a project:
• Starting date
• Specific goals and conditions
• Defined responsibilities
• Budget
• Planning
• Fixed end date
• Parties involved
CHARACTERISTICS OF PROJECT
• (1) Objectives :
• (2) Life cycle :
• (3) Uniqueness :
• (4) Team Work :
• (5) Complexity :
• (6) Risk and uncertainty :
• (7) Customer specific nature
• (8) Change :
• (9) Optimality :
• (10) Sub-contracting
• (11) Unity in diversity
CHARACTERISTICS OF PROJECT
(1) Objectives : A project has a set of objectives or a mission. Once the
objectives are achieved the project is treated as completed.
(2) Life cycle : A project has a life cycle. The life cycle consists of five
stages i.e.
1. conception stage,
2. definition stage,
3. planning & organising stage,
4. implementation stage and
5. commissioning stage.
CHARACTERISTICS OF PROJECT
(3) Uniqueness : Every project is unique and no two
projects are similar. Setting up a cement plant and
construction of a highway are two different projects
having unique features.
(4) Team Work : Project is a team work and it normally
consists of diverse areas. There will be personnel
specialized in their respective areas and co-ordination
among the diverse areas calls for team work.
CHARACTERISTICS OF PROJECT
(5) Complexity : A project is a complex set of activities
relating to diverse areas.
(6) Risk and uncertainty : Risk and uncertainty go hand
in hand with project.
A risk-free, it only means that the element is not
apparently visible on the surface and it will be hidden
underneath
CHARACTERISTICS OF PROJECT
• (7) Customer specific nature : A project is always customer
specific.
• It is the customer who decides upon the product to be produced
or services to be offered and hence it is the responsibility of any
organization to go for projects/services that are suited to
customer needs.
• (8) Change : Changes occur through out the life span of a project
as a natural outcome of many environmental factors.
• The changes may very from minor changes, which may have very
little impact on the project, to major changes which may have a
big impact or even may change the very nature of the project.
CHARACTERISTICS OF PROJECT
• (9) Optimality : A project is always aimed at optimum utilization
of resources for the overall development of the economy.
• (10) Sub-contracting : A high level of work in a project is done
through contractors. The more the complexity of the project,
the more will be the extent of contracting.
• (11) Unity in diversity : A project is a complex set of thousands
of varieties.
• The varieties are in terms of technology, equipment and
materials, machinery and people, work, culture and others.
CLASSIFICATION OF PROJECTS
• The location, type, technology, size, scope and speed are normally the
factors which determine the effort needed in executing a project
• Refer next slide
Key considerations of a project?
Four key considerations always are involved in a project:
1. What will it cost?
2. What time is required?
3. What technical performance capability will it provide?
4. How will the project results fit into the design and execution of
organizational strategies?
• The questions noted above must be answered on an ongoing basis for
each project in the enterprise that is being considered, or for projects
on which organizational resources are being used.
 Project teams
Project teams can be used for a wide variety of projects:
• Design, engineering, and construction of a civil engineering projects such
as a highway, bridge, building, dam, or canal
• Design and production of a military project such as a submarine, fighter
aircraft, tank, or military communications system
• Building of a nuclear power generating plant
• Research and development of a new machine tool
• Development of a new product or manufacturing process
• Reorganization of a corporation
• Landing an astronaut on the moon and returning her or him safely to earth
 Project can be ?
• Project work in the engineering, architecture, construction, defense,
and manufacturing environments is easy to recognize.
• A new plant, bridge, building, aircraft, or product is something
tangible; however,
• the project model applies to many fields, even to our personal lives
• ● Writing a book or article ● Painting a picture ● Having a cocktail
party and dinner ● Restoring an antique piece of furniture or an
automobile ● Getting married or divorced ● Having children ●
Adopting a child ● Designing and teaching a course ● Organizing and
developing a sports team ● Building a house or modifying an existing
house
 PROJECT SELECTION PROCESS
1. Scouting for project ideas
2. Environment appraisal.
3. Corporate appraisal
4. Preliminary screening.
5. Project rating index
6. Sources of positive Net Present Value.
7. Entrepreneur qualities.
Project
finance
Project Finance introduction
• While riding on a high-speed train through Japan, Europe or China, a
passenger may see wind turbines scattered throughout the countryside or
monumental impressive bridges.
• Without realizing it, the passenger is likely to have benefitted from
infrastructure projects that have been financed by a mechanism
called Project Finance
• The high-speed rail, the wind turbine and the bridge are all large and
complex infrastructure ventures. These projects can be made possible
through traditional financing methods however, infrastructure projects are
increasingly financed by this project finance mechanism that engages a
multitude of participants including multilateral organizations,
governments, regional banks, and private entities.
Project Finance Introduction
• Constructing a new office building can usually be
done with a single credit facility.
• But if a company wants to build a nuclear power
plant or an offshore wind park, there is a need
for much more money than one bank is willing
to provide.
Project Finance Introduction
• Project Finance is an area of investment banking or
belongs to specialized area of lending for a financial
institution.
• The main purpose is to help companies to finance
long-term projects that require a huge amount of
external financing.
Financing is provided off-balance sheet
• The biggest difference between an ordinary bank
credit and Project Finance is that an ordinary bank
credit goes directly to the client.
• In Project Finance the money is given to a separate
legal entity – the so-called special purpose entity
(SPE) / SPV
• This SPE or SPV is created just for one specific project.
Financing is provided off-balance sheet
• Let’s take a look at an energy producer who wants to build a
nuclear power plant.
• He would find a new company – the SPE – having the power
plant and other project related assets as its only assets.
• The other side of the balance sheet would consist of the
debt provided by the banks and the sponsor’s equity.
• The sponsors are in most cases the company who initiated
the project itself and private equity investors
 There are several reasons for the creation of
the SPE:
• Risk allocation: The risk for the sponsor is
reduced.
• If the power plant will not generate enough
cash-flow to pay off debt and interest rates, the
SPE will get into financial distress.
• However, the sponsor’s assets will be protected.
 Accounting Considerations

•Project financing is sometimes called off-

balance sheet financing.
•The project debt may not be on the
sponsor's balance sheet, the project debt
will appear on the face of the project
balance sheet.
Accounting Considerations
• The purpose of a project financing is to segregate the
credit risk of the project in order that the credit risk of
lending to either the sponsor or the project can be
clearly and fairly appraised on their respective merits.
• The purpose is not to hide or conceal a liability of the
sponsor from creditors, rating services or
stockholders.
There are several reasons for the creation of
the SPE:
• Credit standing: The bank’s decision to provide
debt is mostly dependent on the future cash
flows of the SPE, not on the credit standing of
the sponsor.
• Therefore, it is possible for a company with a
bad credit standing to get access to external
financing.
There are several reasons for the creation of
the SPE:
• Debt-to-equity ratio: These projects usually require a huge
amount of debt financing.
• Therefore, taking the project on to their own balance sheet
would significantly increase the sponsor’s debt-to-equity
ratio.
• Instead, maintaining the assets and debt related to the
project on the SPE’s balance sheet will mean that the
sponsor will only show his equity stake in the project.
Several banks form a syndicate – Loan
Syndication
• As no bank wants to finance a nuclear power plant alone, a
syndicate of banks is formed to bring in the required
money.
• The sponsor mandates one bank to be the leader of the
syndicate, the so-called Mandated Lead Arranger (MLA).
• The MLA’s role is to handle the communication between
all participating banks and the sponsor. He has a lead role
in underwriting the project and usually he also provides a
portion of the debt.
Project – Sponsors and Participants
• A project includes more parties than just the sponsors and the banks.
There are also
• technical advisers,
• legal advisers,
• public agencies, and
• sometimes even more, depending on the project.
• While the participants handle all their communication with the MLA,
• the MLA itself has to talk to all parties.
What is Project Finance?

Finance for capital intensive, long term projects such as

infrastructure projects – building and operating hospitals, roads

power projects / oil and gas

mining projects
Project Finance Definition

•A financing of a particular economic unit in

which a lender is satisfied to look initially to
the cash flows and earnings of that
economic unit as the source of funds from
which a loan will be repaid and to the
assets of the economic unit as collateral for
the loan.
Project Finance Definition
• Project financing may be defined as the raising
of funds on a limited-recourse or nonrecourse
basis to finance an economically separable
capital investment project in which the providers
of the funds look primarily to the cash flow
from the project as the source of funds to
service their loans and provide the return of and
a return on their equity invested in the project.
Project Finance Definition
• Project finance is the structured financing of a
specific economic entity—the SPV, or special-
purpose vehicle, also known as the project
company—created by sponsors using equity or
mezzanine debt and for which the lender
considers cash flows as being the primary source
of loan reimbursement, whereas assets
represent only collateral.
Project Finance Definition
• Project finance is a method of raising long-term debt
financing for major projects through "financial
engineering," based on lending against the cash flow
generated by the project alone;
• it depends on a detailed evaluation of a project's
construction, operating and revenue risks, and their
allocation between investors, lenders, and other
parties through contractual and other arrangements.
Project Finance Definition
• Project finance is generally used to refer to a non-
recourse or limited recourse financing structure in
which debt, equity and credit enhancement are
combined for the construction and operation, or the
refinancing, of a particular facility in a capital-intensive
industry
• Project finance is defined as the financing of a
standalone, clearly demarcated economic unit
(project).
Non-recourse project financing

• Non-recourse project financing means that there is no recourse to the

project sponsor’s assets for the debts or liabilities of an individual
project.
• Non-recourse financing therefore depends purely on the merits of a
project rather than the creditworthiness of the project sponsor.
• Credit appraisal therefore resides on the anticipated cash flows of the
project, and is independent of the creditworthiness of the project
sponsors.
• In such a scenario, the project sponsor has no direct legal obligation
to repay the project debt or make interest payments.
 Limited recourse project finance
• In most project financings, there are limited obligations and
responsibilities of the project sponsor; that is, the financing is limited
recourse.
• Security, for example, may not suffice to fully guarantee a project.
• The main issue here is not that the guarantees offered fully mitigate
the project but rather implicate the sponsor’s involvement sufficiently
deeply in order to fully incentivize the sponsor to ensure the technical
success of the project.
 Project Finance Contd.

Credit appraisals and debt terms are

typically based on project cash flow
forecasts as opposed to the
creditworthiness of the sponsors and
the actual value of the project assets
FEATURES OF PROJECT FINANCE
• Project finance structures differ between these
various industry sectors and from deal to deal:
• there is no such thing as "standard project
finance, since each deal has its own unique
characteristics.
• But there are common principles underlying the
project finance approach.
Key Features of Project Finance
• Project Co is an SPV – lenders only have recourse to cash
flows or revenue from the project
• ("ring-fenced" project (i.e., one which is legally and economically self-
contained)
• Lenders of the project to rely on technical and economic
valuations ensure its ability to generate sufficient
revenues
• Capital intensive projects on greenfield site
• Lengthy and complex loan documentation
• Highly leveraged
• Higher margins and fees to reflect risk of lenders
Key characteristics of a project financing
• Special purpose company – Contractual partner is a – usually newly created and
clearly demarcated – project company.
• Cash flow-based lending – Loan approval is based on the expected project cash
flow from the respective project, that is, the loans extended are repaid solely
from the cash flows generated by the project.
• Risk sharing structures – The risks arising from the project are allocated to the
various project partners on the basis of their ability to influence and control the
risks.
• Limitation of liability – Liability is limited to the capital contribution of the
sponsors and the assets of the company; providers of debt have no or only
limited recourse to the project sponsors.
• Off-balance sheet finance – Providers of equity are required only to recognise
project finance in their balance sheets if they have an interest in the project
company of 50% or greater
 Uses of Project Financing
Non-recourse/limited recourse
• Non-recourse/limited recourse is one of the key distinguishing factors
underlying project finance.
• Classic long term lending typically depends on cash flows but the
facilities’ ultimate credit rationale resides upon the creditworthiness
of the borrower, since the lender will have a claim over the company’s
assets. In a project financing, this is rarely the case since the size of
the operation may dwarf the size of the participating companies’
balance sheets. Moreover, the borrowing entity may be a special
purpose vehicle with no credit history
Project Finance Vs Conventional Loan Finance
• Project finance differs from conventional loan finance in that it has a
large number of structural characteristics that, though complex, are
beneficial to the project sponsors.
• In the case of project finance, the borrower is not an established
company – as is usually the case for traditional lending – but a newly
created special purpose company (SPC) with no history and no
significant fixed assets of its own.
Project finance Vs Traditional lending
• From a lender’s and also investor’s perspective, therefore, the main
difference between project finance and traditional lending is the basis
on which the loan or investment decision is reached:
• in the case of conventional loan finance, it is taken on the basis of a
largely statistical evaluation of the creditworthiness of the company;
that is, an analysis of historical income statements, balance sheets
and cash flows.
• The total freely available assets of the company are used as security
for the bank providing the finance
Project finance vs Traditional lending
• In contrast, project finance is largely granted on the basis of the available
future cash flows of the project company, which depend on the
development
• In the event of default, liability is largely limited to the assets of the
project company the project and the underlying business plan.
• In light of this heightened financing risk, detailed project risk analysis and
comprehensive risk structuring are essential.
• This requires an in-depth investigation and evaluation of the technical,
economic, legal and organisational aspects of the project and their
inherent risks
• Although project assets are also pledged as security in project finance,
they play a comparatively minor role in the lending decision
Project Finance – Decisive Criteria
The decisive criteria include:
1. The economic potential, that is, the likelihood that the forecast
revenues will be sufficient to meet the return expectations of the
providers of equity and debt with a suitable degree of risk;
2. The risk profile of the project, that is, the likelihood of achieving
the balanced risk profile described above;
3. The scale of the project or the financing requirements.
• All these criteria may be positively influenced by the project
developer during the development process if it intends to leverage
the benefits of project finance.
Importance of Forecasting of Project cash
flows
• Credit appraisals and debt terms are typically based on
project cash flow forecasts as opposed to the
creditworthiness of the sponsors and the actual value of the
project assets.
• Forecasting is therefore at the heart of project financing
techniques.
• Project financing, together with the equity from the project
sponsors, must be enough to cover all the costs related to
the development of the project as well as working capital
needs
Project finance Risks

Project finance risks are therefore highly specific

and it is essential that participants such as
commercial bankers, investment bankers, general
contractors, subcontractors, insurance companies,
suppliers and customers understand these risks
since they will all be participating in an interlocking
structure.
Important or Key Project participants
• Public-sector bodies: role of principals (in the case of PPP structure)
or role of licensors/ concession grantor (in the case of traditional
project finance);
• Providers of equity: sponsors and financial investors as shareholders
of the project company;
• Providers of debt: banks and development banks;
• Various service providers: contracted by the project company to
perform planning and consulting, construction, maintenance,
operation and other management tasks.
PARTIES TO A PROJECT FINANCING
PARTIES TO A PROJECT FINANCING

• Project Company
• Sponsors
• Lenders
• Host Government
• Offtaker
• Suppliers
• Contractors
PARTIES TO A PROJECT FINANCING
• Project Company. The project company is the legal entity that will own, develop,
construct, operate and maintain the project. The project company is generally an
SPV (Special Purpose Vehicle) created in the project host country and therefore
subject to the laws of that country (unless appropriate ‘commissions’ can be paid
so that key government officials can grant ‘exceptions’ to the project).
• Sponsors. The equity investor(s) and owner(s) of the Project Company can be a
single party, or more frequently, a consortium :
Industrial sponsors, who see the initiative as linked to their core business
• Public sponsors (central or local government, municipalities, or municipalized
companies), whose aims center on social welfare
• Contractor/sponsors, who develop, build, or run plants and are interested in
participating in the initiative by providing equity and/or subordinated debt
• Purely financial investors
PARTIES TO A PROJECT FINANCING
• Sponsors:
• The equity investor(s) and owner(s) of the Project Company can be a single
party, or more frequently, a consortium :
• Industrial sponsors, who see the initiative as linked to their core business
• Public sponsors (central or local government, municipalities, or
municipalized companies), whose aims center on social welfare
• Contractor/sponsors, who develop, build, or run plants and are interested
in participating in the initiative by providing equity and/or subordinated
debt
• Purely financial investors
Summarizing
• Project finance is a method of financing an economically viable project on
the basis of the cash flows it is expected to generate.
• The project is a separate legal entity and its cash flows are segregated from
the sponsoring organization.
• The sponsor may be the main user of the project’s output, contractor or
supplier, a consortium or a government.
• The revenue generated from the project should be adequate to cover all
operating expenses, debt-servicing burden and provide an adequate return
to the equity investors.
• This enables the sponsors to shift the operating risk and debt-servicing
burden to the project entity while retaining some benefits from the
project.
Sectors where Project Finance is used
• Energy
• Oil
• Mining
• Highways
• Telecommunications
• Other
History of Project Financing
• Project financing techniques date back to at least 1299 A.D. when the
English Crown financed the exploration and the development of the Devon
silver mines by repaying the Florentine merchant bank, Frescobaldi, with
output from the mines
• The Italian bankers held a one-year lease and mining concession, i.e., they
were entitled to as much silver as they could mine during the year.
• In this example, the chief characteristic of the project financing is the use
of the project’s output or assets to secure financing.
• Another form of project finance was used to fund sailing ship voyages until
the 17th century. Investors would provide financing for trading expeditions
on a voyage-byvoyage basis. Upon return, the cargo and ships would be
liquidated and the proceeds of the voyage split amongst investors.
Project financing Important Questions
• How can a project financing be identified? What details should we expect to find about the
transaction?
• Not every project financing transaction will have every characteristic, but the following provides a
preliminary list of common features of project finance transactions
• Capital-intensive
• Highly leveraged
• Long term
• Independent entity with a finite life
• Non-recourse or limited recourse financing
• Controlled dividend policy
• Many participants
• Allocated risk
• Costly
Recap Common features of project finance
transactions
• Capital-intensive: Project financings tend to be large-scale projects
that require a great deal of debt and equity capital, from hundreds of
millions to billions of dollars. Infrastructure projects tend to fill this
category. A World Bank study in late 1993 found that the average size
of project financed infrastructure projects in developing countries
was $440 million. However, projects that were in the planning stages
at that time had an average size $710 million.
• Highly leveraged. These transactions tend to be highly leveraged
with debt accounting for usually 65% to 80% of capital in relatively
normal cases.
Common features of project finance
transactions
• Long term : The tenor for project financings can easily reach 15 to 20
years.
• Independent entity with a finite life: Similar to the ancient voyage-
to-voyage financings, contemporary project financings frequently rely
on a newly established legal entity, known as the project company,
which has the sole purpose of executing the project and which has a
finite life “so it cannot outlive its original purpose.”
• In many cases the clearly defined conclusion of the project is the
transfer of the project assets
Roles of these major participants in Projects -
Financing
Government
• Though local governments generally participate only indirectly in projects,
their role is often most influential. The local government’s influence might
include: approval of the project, control of the state company that
sponsors the project, responsibility for operating and environmental
licenses, tax holidays, supply guarantees, and industry regulations or
policies, providing operating concessions
Project sponsors or owners:
• The sponsors are the generally the project owners with an equity stake in
the project. It is possible for a single company or for a consortium to
sponsor a project. Typical sponsors include foreign multinationals, local
companies, contractors, operators, suppliers or other participants
Roles of these major participants in Projects -
Financing
• Project company. The project company is a single-purpose entity created
solely for the purpose of executing the project. Controlled by project
sponsors, it is the center of the project through its contractual
arrangements with operators, contractors, suppliers and customers.
Typically, the only source of income for the project company is the tariff or
throughput charge from the project
• The amount of the tariff or charge is generally extensively detailed in the
off-take agreement. Thus, this agreement is the project company’s sole
means of servicing its debt
• Often the project company is the project sponsors’ financing vehicle for the
project, i.e., it is the borrower for the project. The creation of the project
company and its role as borrower represent the limited recourse
characteristic of project finance
Roles of these major participants in Projects -
Financing
• Contractor. The contractor is responsible for constructing the project
to the technical specifications outlined in the contract with the
project company. These primary contractors will then sub-contract
with local firms for components of the construction. Contractors also
own stakes in projects
• Operator. Operators are responsible for maintaining the quality of
the project’s assets and operating the power plant, pipeline, etc. at
maximum efficiency. It is not uncommon for operators to also hold
an equity stake in a project. Depending on the technological
sophistication required to run the project, the operator might be a
multinational, a local company or a joint-venture.
Roles of these major participants in Projects -
Financing
• Supplier. The supplier provides the critical input to the project. For a
power plant, the supplier would be the fuel supplier. But the supplier
does not necessarily have to supply a tangible commodity. In the
case of a mine, the supplier might be the government through a
mining concession. For toll roads or pipeline, the critical input is the
right-of-way for construction which is granted by the local or federal
government
• Customer. The customer is the party who is willing to purchase the
project’s output, whether the output be a product (electrical power,
extracted minerals, etc.) or a service (electrical power transmission or
pipeline distribution). The goal for the project company is to engage
customers who are willing to sign long-term, offtake agreements
• Commercial banks.
• Commercial banks represent a primary source of funds for project
financings. In arranging these large loans, the banks often form syndicates
to sell-down their interests. The syndicate is important not only for raising
the large amounts of capital required, but also for de facto political
insurance.19 Even though commercial banks are not generally very
comfortable with taking long term project finance risk in emerging
markets, they are very comfortable with financing projects through the
construction period. In addition, a project might be better served by
having commercial banks finance the construction phase because banks
have expertise in loan monitoring on a month-to-month basis, and because
the bank group has the flexibility to renegotiate the construction loan
Roles of these major participants in Projects -
Financing
• Capital markets. Major investment banks have recently completed a
number of capital market issues for international infrastructure
projects.
• Through the private placement market, the banks have successfully
raised capital from institutional investors.
• As a consequence, many pundits are touting the capital markets as
the instrument of choice for financing emerging markets transactions.
The capital market route can be cheaper and quicker than arranging a
bank loan.
• Direct equity investment funds. Private infrastructure funds
represent another source of equity capital for project financings.
Roles of these major participants in Projects -
Financing
• Multilateral agencies. The World Bank, International Finance
Corporation and regional development banks often act as lenders or
co-financers to important infrastructure projects in developing
countries.
• Export credit agency. Because infrastructure projects in developing
countries so often require imported equipment from the developed
countries, the export credit agencies (ECAs) are routinely approached
by contractors to support these projects. Generally, the ECA will
provide a loan guarantee or funding to projects for an amount that
does not exceed the value of exports that the project will generate for
the ECA’s home country