Project Finance
Defined by the International Project Finance Association (IPFA) as the following:
The financing of long-term infrastructure, industrial projects and public services based upon a non-recourse or limited recourse financial structure where project debt and equity used to finance the project are paid back from the cashflow generated by the project. Investopedia Says:
In other words, project financing is a loan structure that relies primarily on the project's cash flow for repayment, with the project's assets, rights, and interests held as secondary security or collateral.
Project finance is especially attractive to the private sector because they can fund major projects off balance sheet. Related Terms:
Build-Operate-Transfer Contract
Cash Flow
Combination Bond
Infrastructure
Non-Recourse Debt
Non-Recourse Finance
Off Balance Sheet Financing
Pre-Money Valuation
Scope
Special Purpose Vehicle/Entity - SPV/SPE |