Legal Analysis Of International Project Finance Funding Issues

As a new finance mechanism, International Project Finance is popularly welcomed and applied all around the world. Meanwhile, the application of this new mechanism has encountered some unprecedented problems. Though these problems has been touched upon in laws and regulations of the countries that applied this mechanism, yet, for the complexity and particularity of International Project Finance, the existing laws and regulations can hardly regulate all the details and aspects.As the fundament and objective of Project Finance, to raise capital is the most important step in the process of the project finance. Where comes from the capital, by what channel and in what means, and what is the related legal problem? All these questions about capital in International Project Finance need to be answered. This paper proceeded with the legislative and judicatory differences between the Continental Legal System and the English-American Legal System as well as the differences between China's legal system and foreign legal system, and outspread to discuss two major forms of finance: project loan and project bond, and then analyzed the legal issues in International Project Finance.The first part of this paper provided a survey of the International Project Finance and project capital, then probed into the basic issues and clarified the legal characteristics of the project finance, and analyzed the source of project capital and the factors that influence the structure of the capital.Bond Financing is going to be an important form of project finance. The second part of this article is some legal issues about bond finance. Starting with the types, forms of issue and legal status of parties about project bond, this paper emphasized to deal with two major difficulties of project bond: the limitation of action and prospectus of the project bond. The third part of this paper is the legal problems concerning project international loan. Loan is still the main source of capital. From aspect of the structure, guarantee, domestic and international supervision and control of international loan, this paper endeavored to clarify the difficulties in this field. In the end, the article discussed the risk-prevention issue of international loan, and brought forward several special aspects and important clauses of the international loan agreement. Also, this paper sought to provide some means and skills about the remedy of breach of the international loan agreement.