Other examples of project finance include mining, oil and gas, and buildings and constructions. Real estate project finance cash flows should be sufficient to cover operating expenses and to fund the financing repayment requirements. Typically, the financing is made up of debt.

Project financing is a loan structure that relies primarily on the project’s cash flow for repayment, with the project’s assets, rights, and interests held as secondary collateral. Project finance is especially attractive to the private sector because companies can fund major projects off-balance sheet.

The most visible characteristic of project finance is that it is non-recourse debt as to individual shareholders, including the project sponsors. Non-recourse financing means the borrowers and shareholders of the borrower have no personal liability in the event of monetary default.

Because individuals, businesses, and government entities all need funding to operate, the finance field includes three main subcategories: personal finance, corporate finance, and public (government) finance.

Project finance may come from a variety of sources. The main sources include equity, debt and government grants. Financing from these alternative sources have important implications on project’s overall cost, cash flow, ultimate liability and claims to project incomes and assets.