Project Finance is a method of funding large-scale projects, typically in sectors like infrastructure, energy, and transportation. It involves raising capital based on the projected cash flows generated by the project itself, rather than relying on the balance sheets of the sponsors. This approach allows for the allocation of risks and rewards among various stakeholders, including investors, lenders, and project developers. In Project Finance, a special purpose vehicle (SPV) is often created to isolate the project's financial risks. This SPV enters into contracts with various parties, such as contractors and suppliers, ensuring that the project can be completed and operated efficiently. The financing structure usually includes a mix of debt and equity, tailored to the project's specific needs.