Project Finance · Question

What happens if my project is delayed and commercial operations start late?

Short answer

A delay pushes out the date on which the project starts earning, but interest and the repayment clock may keep running. That can raise the cost of the project, shrink the moratorium and strain your ability to pay early instalments. Tell the lender as soon as a delay is likely; lenders can sometimes revise dates or terms, but outcomes depend on the reasons and the account's record.

In more detail

Most project loans are structured around a start date for commercial operations. Interest during construction is typically met from the project cost, and a moratorium gives a window before principal repayment starts. If the start slips, several things can follow.

The interest paid during construction grows, which increases the project cost and may need extra funding.
The moratorium may expire before the project earns anything, leaving instalments due from the promoter's other resources.
The sanction may carry a deadline for completion, and passing it can require a formal revision.
Cost overruns, from price rises or extended contractor time, can open a funding gap.

Lenders look at why the delay occurred. Delays caused by approvals, supply issues or weather outside your control are viewed differently from delays caused by weak planning or diverted funds. A well-documented explanation and a realistic revised schedule help.

Possible responses, which only the lender can approve, include extending the date of commercial operations, adjusting the moratorium and instalment dates, or funding a justified overrun with a mix of promoter money and additional loan. Lenders may ask for a fresh appraisal of the project and a revised projection of cash flows.

Raise it early, with a plan

Approach the lender with the cause, the revised timeline, the extra cost and how you propose to fund it. An early, organised conversation is received better than a sudden request when instalments have already begun to fall due.

If repayment obligations begin before the project can pay them, an account may start showing irregularity. Speak to the lender before that point.

This is general information and not advice on a specific loan; the lender decides what relief, if any, is possible.

Key points

Delays can extend interest during construction and raise total project cost.
A shrinking moratorium can leave instalments due before the project earns.
Lenders consider the cause of the delay, so keep a written record.
Relief such as date extension or revised instalments is the lender's decision.
Approach the lender early with a revised schedule and a funding plan.

Who this applies to

Promoters whose construction or machinery supply is running behind schedule.
Borrowers approaching the end of a moratorium with the project not yet started.
Finance heads managing overrun funding.

Last reviewed 3 October 2026

This answer is general information, not advice on your particular case. Terms, eligibility, and requirements change, so check the current position with the relevant institution or authority.