The capital requirements introduced in the aftermath of the global financial crisis had a chilling effect on long-term lending by the banks. As a result, in order to meet their substantial infrastructure and energy needs, governments and project sponsors looked to innovative funding solutions from new sources of capital. This has led to the resurgence of project bonds, which offer an opportunity for sponsors to diversify their funding base by tapping into the capital available from institutional investors.
In tandem with these global developments, project bonds have also inevitably appeared in the Turkish market due to Turkey's enormous infrastructure and energy needs. This note provides an overview of project bonds, with a particular emphasis on the Turkish market.