Sustainable finance
Project Finance
Financing of large projects through a standalone structure repaid from the project's own cash flows, the dominant model for infrastructure and energy.
Definition
Project finance is the long-term financing of infrastructure and industrial projects based on the projected cash flows of the project itself rather than the balance sheets of its sponsors. A special-purpose vehicle holds the project; lenders have limited or no recourse to sponsors if the project fails, making rigorous allocation of construction, market and political risks central to the structure.
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