This document excerpts the relevant segments of the EBA reference that defines the standardized scorecard for project finance exposures
(a) where the purpose of the specialised lending exposure is to finance the development or acquisition of large, complex and expensive installations, in particular, power plants, chemical processing plants, mines, transportation infrastructure, environment, and telecommunications infrastructure, so that the income generated by the assets is the money generated by the contracts for the facility’s output obtained from one or several third parties (‘project finance exposures’), institutions shall apply the assessment criteria referred to in Annex I (see included spreadsheet ScorecardCharacteristics.xlsx)
Institutions shall document for each type of specialised lending exposure the assignment of weights to each factor and the justification for these assignments in accordance with Article 1(3)(d).
Assess the specialised lending exposure with reference to each factor, against the assessment criteria provided for each of the sub-factors, some of which are, in turn, further specified in sub-factor components, contained in the relevant Annex to this Regulation
Where one or several of the sub-factors are further specified in sub-factor components, determine the cardinal numbers of the categories to which the specialised lending exposure is assigned for each sub-factor component on the basis of the assessment referred to in paragraph 2(b), and combine the assignments of these sub-factor components on the basis of their relative importance to determine the cardinal numbers of the categories of these sub-factors
Where none of the sub-factors are further specified in sub-factor components, determine the cardinal numbers of the categories to which the specialised lending exposure is assigned for each sub-factor on the basis of the assessment referred to in paragraph 2(b)
Combine the assignments of the sub-factors on the basis of their relative importance to determine the cardinal number of the categories of the respective factors
Specify the weight in percentage that they assign to each factor, on the basis of the relative importance of each factor under the condition that such a weight is not lower than 5% and not higher than 60%
Determine the weighted average of the cardinal numbers of the categories under which they have classified the specialised lending exposure for all factors;
Where the weighted average is a decimal number, round that number to the nearest cardinal number
- EBA/RTS/2016/02 (13 June 2016). FINAL draft Regulatory Technical Standards on Assigning Risk Weights to Specialised Lending Exposures under Article 153(9) of Regulation (EU) No 575/2013 (Capital Requirements Regulation – CRR)