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Why is an infrastructure project justified for Longer tenor Debt funding as compared to other project financing proposals?

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Question added by Mohammed Amin Petiwala , CFO , Osool Poultry SAOC
Date Posted: 2016/02/23
Manish Manchandya
by Manish Manchandya , Treasurer , Saudi Electric Company

An Infrastructure project generally has a longer life and generates returns over the life of the project. If we use a short term financing for a long term asset then it would asset -liability mismatch. It is preferable to match the two with longer dated financing for a longer dated asset. You can fund long dates asset with short term funding but then it would create refinancing risks and risks on the cash flows from the project

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