Project finance is a specialized funding method used to finance large-scale projects, such as infrastructure, energy, or construction, based on the project’s expected cash flows. Lenders evaluate the project’s feasibility and risks rather than solely relying on the borrower’s creditworthiness, making the project’s assets and cash flows the primary collateral. Financing is structured as non-recourse or limited recourse, meaning lenders primarily rely on project revenues for repayment rather than the sponsors’ or borrowers’ assets. The loan’s terms and repayment are tailored to the project’s lifespan and cash flow generation, and lenders often require comprehensive due diligence and risk assessments before funding.