Why is it Important to Understand Project Finance as a project manager?

<p><span data-preserver-spaces="true">Unlike regular corporate finance, where a company takes responsibility for the loan, project finance creates </span><span data-preserver-spaces="true">a separate legal entity called a Special Purpose Vehicle (SPV) to</span><span data-preserver-spaces="true"> manage the project's finances.</span></p><p><span data-preserver-spaces="true">As a project manager, it is important to understand project finance because:</span></p><ul><li><span data-preserver-spaces="true">It allows companies to raise huge investments without affecting their </span><span data-preserver-spaces="true">main</span><span data-preserver-spaces="true"> business finances.</span></li><li><span data-preserver-spaces="true">Investors and lenders can assess a project's profitability and risks separately from the company's other operations.</span></li><li><span data-preserver-spaces="true">If the project fails, the company's other assets remain safe since the SPV is legally independent.</span></li><li><span data-preserver-spaces="true">Understanding project finance helps professionals plan, structure, and secure funding for big projects while managing financial risks.</span></li></ul>

0 Upvotes 0 Upvotes 0 Downvotes

• • Report Abuse
• Comment