Project finance is a form of financing based on the underlying assets, where the Bank finances a certain mix of assets on an individual basis.
Project finance is designed to evaluate the aggregate benefit and expenses with the view of selecting the most efficient source and way of investment project financing for the sake of welfare (market value) of the company as a whole.
As compared with classical lending, the source of repayment of financial resources made available under project finance is the flow of funds generated from a specific project.