n NISM Certifications
XV NISM Series XV
Medium

In project finance, which of the following is the primary source of repayment for lenders?

Practice question from NISM XV Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Sponsor’s equity contribution

  2. Cash flows generated by the project

    Correct answer

  3. C

    Government grants

  4. D

    Debt refinancing

Why this is the answer

Project finance relies on the cash flows generated by the project to service debt. Sponsor equity is initial capital, and government grants or refinancing may support the project but are not primary repayment sources.

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