Study of Project Finance Versus Corporate Finance

The term Project Finance (PF) has been used to explain many types of financing of projects both with and without recourse. A specific element of project finance is the necessity of creating Special Purpose Vehicle (SPV). A guarantee for return of capital used to finance project are the SPV s assets. In traditional or corporate financing, the sponsoring company typically procures capital by demonstrating to lenders that it has sufficient assets on its balance sheets. This study attempts to study project financing as an alternative method of financing projects and compare this methods and argue why project finance should be used, instead of traditional or corporate financing methods.