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INTRODUCTION: Project finance is the financing of long-term infrastructure and industrial projects based upon a complex financial structure where project debt and equity are used to finance the project. Usually, a project financing scheme involves a number of equity investors, known as sponsors, as well as a syndicate of banks

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Project FinanceWorking Capital finance or the Working Capital credit facilities that we have discussed are in the nature of short-term financing. The money lent by the bank by way of WC credit facilities such as Cash Credit, Overdraft, Bills Purchased/Discounted, etc. returns back to the bank at the end of each operating cycle which may extend, typically, up to 3-4 months. In other words, the cash borrowed by the company from the bank turns over 3-4 times in a year. In these cases, the repayment of the cash to the bank account is from sale of the finished goods/realization of trade receivables. Because of this, the WC credit facilities are sanctioned for a 1 year period, and continuation of the facilities is subject to annual review & renewal. These characteristics of Working Capital finance make it short-term financing. Because of this short-term nature, WC credit facilities are legally repayable on demand in terms of the relative loan agreement with the bank.On the other hand, corporates may require long-term finance. As we have already seen, a corporate may need to invest substantially in fixed assets such as land, factory building, plant & machinery, equipments, office building, etc. for its operations. These assets are not to be sold and realized for cash in the normal course of business, i.e. they will not be turning over as it happens in the case of inventory & receivables. They remain with the company for long periods, are subject to we

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