Project financing

Project financing

A form of asset-based financing in which a firm finances a discrete set of assets on a stand-alone basis.

Project Financing

A way to finance an activity using debt where the debt is repaid from the funds generated by the activity. For example, project financing may involve issuing a bond to pay for the construction of a museum and repaying it from ticket sales for that museum. Project financing is often very complex and is most common in the telecommunications, utilities, transportation, and mining industries. Very often, a company conducting project finance will set up a different corporation or other entity for the project to shield the remainder of the company from liability if the debt goes into default.