Project financing refers to a financing arrangement in which the project sponsors (i.e. shareholders) establish a project company for the purpose of operating a specific project. The project company acts as the borrower, raising loans with its own cash flows and total project revenues serving as the primary source of repayment, and the assets of the project company pledged as collateral.

This type of financing is generally applied to large-scale infrastructure projects, such as power generation facilities, expressways, bridges, tunnels, railways, airports, urban water supply systems, and wastewater treatment plants, as well as other construction projects with large investment ?? and long-term, stable expected income.