Project finance and investment banking are both integral parts of the global financial ecosystem, yet they serve distinct purposes and cater to different objectives. While investment banking involves activities like underwriting securities, mergers and acquisitions (M&A) advisory, and capital-raising for corporations, project finance focuses on funding specific infrastructure or industrial ventures using the project’s future cash flows as collateral. This blog sheds light on the major differences between project finance and investment banking, exploring where they overlap and how they diverge.
Project finance is a specialized lending approach where lenders provide long-term funding for capital-intensive projects—such as power plants, renewable energy facilities, toll roads, or mining ventures—based on the project’s prospective revenue stream. The main characteristics of project finance include:
In essence, project finance involves pooling capital from various sources—such as commercial banks, export credit agencies, development finance institutions, and private investors—to fund a standalone project that has its own unique risk-reward profile.
Investment banking encompasses a broad range of financial services aimed at helping corporations, governments, and institutions raise capital or pursue strategic initiatives. Major investment banking activities include:
Investment banking focuses heavily on corporate finance transactions rather than financing a specific asset or standalone project. The risk profile is different—banks typically look at a company’s overall balance sheet, market positioning, and future earnings potential rather than the discrete cash flows of a single asset.
| Aspect | Project Finance | Investment Banking |
|---|---|---|
| Focus | Funds specific infrastructure or industrial ventures | Corporate finance, M&A, capital markets advisory |
| Risk Assessment | Primarily based on future project cash flows | Evaluates overall corporate earnings, balance sheet, and market strategy |
| Legal Entity | Special Purpose Vehicle (SPV) | Operates within the existing corporate framework |
| Recourse | Non-recourse or limited recourse to project sponsors | Full or partial recourse to company assets and equity |
| Common Sectors | Energy, transportation, utilities, heavy industry | All sectors (tech, finance, real estate, consumer goods, etc.) |
While they differ in scope and objectives, there can be overlap between project finance and investment banking:
Project finance risk hinges on an asset’s ability to generate consistent revenue once operational. Lenders conduct thorough feasibility studies, focusing on:
In investment banking transactions, risk is often broader, encompassing the client’s overall corporate strategy, market competition, and economic cycles that can affect share prices or corporate valuations.
Financely specializes in providing advisory services for large-scale project finance transactions. Our approach includes:
Project finance and investment banking are distinct, yet complementary, facets of the financial world. Project finance zeroes in on the standalone cash flows of a large-scale asset, while investment banking addresses broader corporate finance needs. Understanding these differences is critical for businesses looking to fund infrastructure projects or raise corporate capital. With the right advisory support, sponsors and companies can tap into both spheres effectively—securing long-term project finance while leveraging investment banking expertise to broaden funding sources.
Financely provides specialized project finance advisory, ensuring robust structures that attract lenders and investors. Contact us today to explore tailored financing solutions for your infrastructure or industrial ventures.
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Tap into solutions like letters of credit, bank guarantees, and payment facilitation. We address the challenge of global transaction risk through structured strategies that foster cross-border growth. Complete the form to unlock streamlined funding aligned with your commercial objectives.
Submit a RequestAccess non-recourse funding for infrastructure, renewable energy, or other capital-intensive ventures. We mitigate capital constraints by isolating project assets and focusing on risk management. Provide your details to receive a structure that drives growth and maximizes returns.
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Submit a RequestOnce we receive your submission, our team will review your information to determine feasibility. If eligible, you will receive a proposal or term sheet within 1–3 business days. Visit our FAQ and Procedure pages for more information.
Disclaimer: Financely provides financing based on due diligence and feasibility. Approval is not guaranteed, and past performance does not predict future outcomes. All terms are subject to review. Financely primarily assists with structuring and distribution. Qualified parties carry out the project if the client approves the proposal.
Financely advises growth-focused businesses on accessing capital by introducing their opportunities to professional investors. Financely is not a securities broker or dealer. Where appropriate, engagements are coordinated with regulated broker-dealers, investment banks, legal counsel, and other specialists.
Financely does not solicit, offer, or accept orders to buy or sell securities and makes no assurance regarding capital-raising outcomes.
Services are strictly business-to-business. Financely does not provide personal finance, consumer credit, or retail advisory services.
Advisory services are reserved for post-revenue companies that recognize the time and resources required for professional underwriting.
All mandates start with an RFQ. We review submissions, issue a brief Go/No-Go memo, and where bankable, release a Term Sheet that leads to funding. We arrange capital across Senior Secured, Unitranche, Second Lien/Mezzanine, Preferred Equity, and Gap Solutions. We do not process deals by email or chat.
Letters of Credit, Standby LCs, Confirmations, Receivables Finance, and Inventory Lines with control.
Funding arranged for trade flows with instruments sized to your cycle and aligned to delivery and settlement.
Move forward to secure working capital and keep goods moving. Submit the RFQ to start underwriting for funding.
Limited or non-recourse structures for energy and infrastructure with lender-ready materials.
Funding solutions aligned to project cash flows with credible covenants and conditions to reach notice to proceed.
Advance the file to termable status. Submit the RFQ so we can underwrite and secure funding.
Debt and Preferred solutions anchored on cash flow, Quality of Earnings, and clear closing mechanics.
Funding across senior, unitranche, and preferred to match stable cash flows and acquisition timelines.
Get financed on workable terms for closing. Submit the RFQ to start underwriting.
Acquisition, development, bridge, and refinance with lender-ready packs and third-party reports managed.
Funding calibrated to DSCR, leverage, and tenancy with terms designed to close.
Move to a financeable package. Submit the RFQ to initiate underwriting for funding.
KYC and Source of Funds required. Engagements are best-efforts and subject to underwriting. Preference for operating companies with meaningful revenue. See our FAQ and Procedure.
Financely Inc. (“Financely”) provides corporate-finance advice and is wholly owned by Aurora Bay Trust, a trust formed under Bahamian law, together with its authorized affiliates. Depending on deal structure, jurisdiction, and local rules, engagement may be carried out through Financely Group LLC, a non-deposit-taking non-banking financial company; Ashford Capital Advisory LLC; or another related entity. Financely and its affiliates are not registered as securities broker-dealers. When a mandate involves the purchase or sale of securities and a registered intermediary is required, all orders are introduced to and executed by a U.S. broker-dealer registered with the SEC and FINRA, acting as “chaperone” under SEC Rule 15a-6 (17 C.F.R. § 240.15a-6). Nothing here constitutes an offer, solicitation, or recommendation to buy or sell any security. Before proceeding, read our Terms of Service to confirm that engaging Financely Group LLC, Ashford Capital Advisory LLC, or any affiliate aligns with your legal and regulatory requirements.In the United States, we operate as an
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