Project Finance (Project Management) Essay Example | Topics and Well Written Essays - 1000 words - 1

Project Finance (Project Management) - Essay Example â€Å"Project finance is the financing of long-term infrastructure, industrial projects and public services based upon a non-recourse or limited recourse financial structure where project debt and equity used to finance the project are paid back from the cashflow generated by the project† (Project Finance Definition). Simply speaking, project finance is the process of accumulation of money and its investment in some particular project. Usually, there are two types of project finance – equity financing and debt financing. The debts and an interest rate are paid from the cash flows, generated by a project. Generally, project finance can be called as a part of project management. Project finance is usually a long-term process. The reason for it is that the projects financed are long-term as a rule. This process begins from looking for the ways of a project’s financing and ends with paying dividends to stakeholders and investors. . â€Å"It takes a lot more than a good idea to develop a successful manufacturing venture. You need to know where to find the resources, both financial and technological, and you need to find the right people with the right skills to do the job. Knowing where to look for these resources can save you precious time and money, and earn you some valuable partners in the process† (Sudarkasa). Identification and development of a project – any project should be presented to potential investors in some formal way. They should be able to weigh up all the pros and cons for a project. This information is needed to make a final decision whether to invest or not in a project; Determination the feasibility of the project – the main factor for investors is whether a project is able to bring social and economic benefits or not. That is why a vivid plan how to earn money should be drawn and presented to all the stakeholders. These two stages are among the most important in the process of