Project loan

Project finance is the long-term financing of infrastructure and industrial projects based upon the projected cash flows of the project rather than the balance sheets of its sponsors. Usually a project financing structure involves a number of equity investors, known as sponsors and a syndicate of banks or other lending institutions that provide loans to the operation.

They are most commonly non-recourse loans, which are secured by the project assets and paid entirely from project cash flow, rather than from the general assets or creditworthiness of the project sponsors, a decision in part supported by financial modeling see Project finance model.