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Greenfield diet difficult for investors to digest
Getting institutional investors to accept construction risk is one of the hardest nuts that the infrastructure market has yet to crack. The early stages of a project are clearly fraught with uncertainty. Even if you have a high-quality contractor and a well-structured project, cost overruns is still a concern. Funding construction has traditionally been the preserve of the banks, with many financings taking the form of a three-year to five-year bridge loan to cover construction leading to a refinancing either in the loan market or via bonds with irrevocable triple-A monoline guarantees.
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