Alternative Investments

Project Finance

Definition

What is Project Finance?

Financing repaid primarily from the cash flows of a specific project, often with limited recourse to sponsors.

Example in practice

A toll-road loan is serviced from toll revenue.

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A company that finances producers in exchange for a percentage of revenue or output.

A financing arrangement granting the investor the right to buy part of future production at a predetermined price.

Non-bank lending to privately held companies or assets.

An investment combining debt and derivatives to create a defined payoff.

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