Project Finance

Project finance is a specialized form of funding used for large-scale infrastructure, industrial, and development projects. It provides long-term financing based on the projected cash flow of the project rather than the balance sheet of the sponsors. This type of financing is commonly used in sectors like power, roads, ports, telecom, and oil & gas. The repayment is structured from the revenue generated once the project becomes operational. Lenders usually conduct detailed risk analysis before approving project finance. It often involves multiple stakeholders such as banks, financial institutions, and private investors. Project finance helps reduce the financial burden on the sponsors by limiting their liability. It also encourages public-private partnerships for developing national infrastructure. The loan tenure is generally long, aligned with the project’s life cycle. Overall, project finance is a key driver of economic growth by enabling large projects that require huge capital investment.