Most collateral is complicated. Property needs appraisals and carries market risk, receivables need auditing, equipment depreciates. Gold bullion is the exception: its value is quoted continuously on a global market, its storage is a solved problem, and its ownership can be documented beyond doubt. That makes it one of the cleanest underlying assets in structured project finance.
How gold enters the structure
The process is deliberately standardized. The gold is valued at the LBMA (London Bullion Market Association) market price, the global reference for wholesale bullion. For the duration of the arrangement it must be stored securely, either at a bank or at an approved security facility, with insurance against loss or damage.
On that basis, an adequate loan facility is arranged, which the client holds in their custodial account at a partner bank. The bullion itself is not sold, not lent out and not transferred to the project: it serves as the underlying asset that makes the structured financing possible.
What the owner keeps
The asset owner's position is the defining feature of the model:
- The gold remains the owner's property throughout the term.
- Storage is insured, at a bank vault or qualified security house.
- No bank guarantee is required from the owner at any point.
- After completion of the structured financing, the asset is free for any other use, unless otherwise agreed.
An owner who does not run a project of their own can still participate: as a cooperation partner, or sponsor, providing the underlying asset for a project owner and receiving defined benefits from the partnership, while the bullion is never directly at risk in the project.
The parameters
For gold-backed structures, the minimum is EUR 100 million in gold assets, with a tenor of at least 12 months. The resulting facility can fund projects from 30 million EUR/USD up to several billion, with first proceeds within 40 banking days after compliance. For cash-backed structures the minimum is lower, at EUR 50 million; the underlying assets page compares both routes.
Why this matters for project owners
For a project owner, a sponsor with bullion holdings can be the difference between a stalled project and a funded one. The owner gains access to capital without bank loans or investor dilution; the sponsor's assets stay secured and insured under their control; and the entire arrangement runs under the supervision of an international law firm, with compliance completed before any funds move.
Other asset types can qualify as well, subject to special procedures or additional insurance. The starting point is always the same: a project teaser and a clear picture of the available assets, reviewed in the initial advisory at no cost.