Project Financing

Project financing is a method of financing a specific business project or asset using financial resources that are secured and managed specifically for that project.  Unlike traditional corporate financing, project financing relies mainly on the cash flow generated directly by the project itself to repay the debt and equity involved.  This type of financing often involves creating a separate entity just for the project to isolate its financial risk from the parent company and repayment is primarily from the project's revenue streams rather than the overall company balance sheet. 

Project financing follows a structured process that includes defining the project's goals and scope, conducting feasibility and cost-benefit analysis, indentifying funding sources such as equity, debt, or public-private partnerships, and preparing proposals to secure the funds.  This approach ensures the project is financially sustainable and mitigates risks for investors and lenders.  This type of financing is particularly suitable for large-scale, long-term business projects or infrastructure developments.