Project Finance Was Underwritten on certainty

That certainty is now the exception.

Project finance was built on a simple premise: lend against contracted cash flow, not the sponsor's balance sheet.

That premise depended on contracts doing most of the work — long-term offtake agreements, fixed power prices, predictable usage. Lenders priced certainty, not the asset itself.

Across parts of the renewables and infrastructure market, portfolios increasingly combine contracted and merchant exposure, as long-dated fixed-price agreements become harder to secure.

Lenders haven't stepped back from project finance. They've adjusted what they're willing to underwrite — accepting more revenue volatility, but structuring around it more carefully: shorter tenors, tighter covenants, lower leverage against the uncontracted portion of cash flow.

The deals progressing are the ones where sponsors have already done that work — separating what's genuinely contracted from what's closer to a forecast, and structuring the capital stack accordingly.

Certainty hasn't disappeared from project finance. It's just no longer assumed.