Project financing for development of solid mineral deposits under tightening bank lending requirements

M.P. Bondarenko, T.G. Popadyuk, O.B. Skripnik, O.V. Borisova
Financial University under the Government of the Russian Federation, Moscow, Russian Federation
Russian Mining Industry №2/ 2026 p. 161-168

Abstract: The article examines transformation of the project finance mechanisms for mining companies in conditions of increasing regulatory requirements for the bank capital adequacy and the borrower credit quality. The study hypothesizes that the tightening of prudential standards (Basel III / Basel 3.1) combined with the increasing Bank of Russia key interest rate leads to a structural shift in the mining project financing models – from conventional bank lending toward hybrid schemes involving development institutions, off-take agreements, and public-private partnerships. The methodological framework includes the discounted cash flow analysis (DCF), debt service coverage ratio (DSCR), loan life coverage ratio (LLCR), scenario-based NPV sensitivity analysis to price and interest rate shocks, and a comparative analysis of financial models for copper, gold, and iron ore mining projects in the Russian Federation over 2020–2025. The empirical base covers 18 mining projects with the aggregate capital expenditure exceeding 1.2 trillion rubles. The study found that an increase in the Bank of Russia key interest rate from 7.5% to 21% resulted in an increase of the weighted average cost of the debt capital by 11.4 percentage points, reducing the estimated NPV of a typical copper mining project by 34–42%. The minimum DSCR threshold acceptable to banks increased from 1.25x to 1.50x–1.70x. The share of the hybrid financing schemes went up from 18% in 2020 to 47% in 2025. The results obtained demonstrate that application of the VEB.RF Project Finance Factory mechanism combined with the off-take agreements reduces the effective borrowing rate by 3.5–5.2 percentage points, restoring investment attractiveness of the projects. The practical significance of the research lies in developing an adaptive financial model that integrates prudential constraints into efficiency assessment of the mining project.

Keywords: project finance, mining industry, solid minerals, bank lending, debt service coverage ratio, weighted average cost of capital, Basel III, public-private partnership, investment attractiveness, off-take agreement

For citation: Bondarenko M.P., Popadyuk T.G., Skripnik O.B., Borisova O.V. Project financing for development of solid mineral deposits under tightening bank lending requirements. Russian Mining Industry. 2026;(2):161–168. https://doi.org/10.30686/1609-9192-2026-2-161-168

Article info

Received: 25.12.2025

Revised: 24.02.2026

Accepted: 27.02.2026

Information about the authors

Maya P. Bondarenko – Cand. Sci. (Econ.), Associate Professor, Department of Marketing, Financial University under the Government of the Russian Federation, Moscow, Russian Federation; e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Tatyana G. Popadyuk – Dr. Sci. (Econ.), Professor, Department of Strategic and Innovation Development, Higher School of Management, Financial University under the Government of the Russian Federation, Moscow, Russian Federation; e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Oksana B. Skripnik – Dr. Sci. (Econ.), Professor, Department of Economic Security and Risk Management, Financial University under the Government of the Russian Federation, Moscow, Russian Federation; e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Olga V. Borisova – Cand. Sci. (Econ.), Associate Professor, Department of Corporate Finance and Corporate Governance, Faculty of Economics and Business, Financial University under the Government of the Russian Federation, Moscow, Russian Federation; e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

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