Successful infrastructure projects typically have a well-defined timeline and process, as well as an accompanying set of documentation and permits required - where preparation and application of permits are well built into the process.
Experienced financiers and contractors typically also structure the project phases and timelines in a way that minimizes additional costs or risks - for example, disbursements of financing in tranches, only upon completion of certain milestones, as well as requiring explicit legal owners (usually some municipality) for construction and maintenance of "last mile" infrastructure or concessions to mitigate specific project risks (such as base or availability payments to account for demand risk).
As such, a key instrument to ensure appropriate project structure and terms would be via the documentation or proof of preparation. These typically include:
• Rigorous project governance structures, proof of technical capability (from governance structures with clear roles and responsibilities to securing sufficient preparation funding, and minimizing costs through standardization)
• Permits for land, construction, discharge, and other regulatory requirements
• Economic feasibility and financial viability studies, environment assessment studies (for example, conducting robust demand forecasting)
• Technology viability assessments to determine if technology is proven
• Risk identification, allocation, and transfer (with incentives, risk mitigations, and use of insurance)23
• Other documents as required, including availability of financing, offtake agreements (if separately required)
This process can become convoluted given the number of stakeholders involved. Additionally, inconsistent approvals and the revoking of permits in some emerging markets can deter investors, leading them to build in a higher hurdle rates or longer project timelines which in turn reduce project bankability.