Ring Fencing

Description of Ring Fencing. Explanation.

Definition Ring Fencing. Description.

Ring Fencing is a term that is used in a project finance context. Typically it is a legal and financial arrangement to work on risky projects and ventures in such a way that failure does not lead / reflect in the financials of the parent company. The risk is limited to the capital of the project venture. This type of financing is widely used in highly uncertain businesses like petroleum exploration, mining activities and also in ventures in non-conventional energy harnessing, infrastructure projects etc.

Compare with: Special Purpose Vehicle  |  Tax Haven  |  Joint-Venture  |  Chinese Wall

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End of description Ring Fencing. An explanation.