ABSTRACT
Project financing allows a corporation to reduce its construction and operating risks and to lower its cost of obtaining capital by allocating the costs and benefits of owning and operating a facility among other participants, customers, suppliers and governmental entities. This chapter presents project financing opportunities designed to appeal to the capital-intensive industries, as well as to newcomers faced with capital expansion requirements. Effective structuring is the most important part of successful project financing. Potential participants, in close cooperation with their financial advisor, should evaluate the feasibility of the project financing. A project's financial feasibility depends on the credit strength, expertise, and the roles of the potential participants as well as the economics of the project itself. The participants and the financial advisor must decide whether the legal form of the venture undertaking the project financing should be an existing or a new entity. A properly structured financing plan will allocate risks among participants, investors, customers, and interested third parties.
