Project finance is still in its infancy and the number of true project financed deals can be counted on one hand. Beneath the surface, though, banks and companies are preparing the ground for what could turn into an explosion of project-financed deals within a few years.
The political turmoil caused by the so-called Yukos affair – what was seen as a politically motivated attack on oil company Yukos – undermined investment sentiment and seriously impaired domestic fixed investment activity. Before the Yukos fracas, companies typically relied on their own cash flow for half their investment needs, but that proportion rose to 70% last year.
