Why would a European Bank fund a project non-recourse?

The result of the model loan structure is “non-recourse” only because the bank (service provider) actually brings in third-party collateral and structures it into the funding package, covering 100% of the loan. To the lender, this is not “non-recourse” at all, it is full recourse, because the bank provider actually gives the collateral directly to the lender at closing.

The lender has full recourse (and even full possession) of the collateral. As a result, all property and assets of the client and project remain free and clear, with no liability. But the lender is fully covered.