An Overview of Project Finance and Infrastructure Finance - 2014 Update

Posted: 27 Jun 2014

Date Written: June 3, 2014


Provides an introduction to the fields of project finance and infrastructure finance, and gives a statistical overview of project-financed investments over the years from 2009 to 2013. Examples of project-financed investments include the the Kashagan oil field development in Kazakhstan (1997), the $1 billion Port of Miami Tunnel (2007), the $54 billion Gorgon liquefied natural gas (LNG) project in Australia (2009), and the $6 billion Oyu Tolgoi copper mine expansion in Mongolia (2014). Globally, firms financed a record $415 billion of capital expenditures using project finance in 2013, and the use of project financed-investment has grown at a compound rate of 8% over the past 15 years despite several macroeconomic crises. This note focuses primarily on private sector investment in industrial and infrastructure projects and contains four sections. The first section defines project finance and contrasts it with other well-known financing mechanisms. The second section describes the evolution of project finance from its beginnings in the natural resources industry in the 1970s, to the U.S. power industry in the 1980s, to a much wider range of industry applications and geographic locations in the 1990s and 2000s, and most recently to infrastructure finance in the 2010s. The third section provides a statistical overview of project-financed investment over the last five years (2009 to 2013) and looks at industry, project, and participant specific data. The third section also provides recent data on infrastructure investments and public-private partnerships. The final section discusses current and likely future trends.

Keywords: Project finance, Infrastructure, International finance, corporate governance, capital budgeting, financing, Natural resources

Suggested Citation

Esty, Benjamin C., An Overview of Project Finance and Infrastructure Finance - 2014 Update (June 3, 2014). HBS Case No. 214083, Available at SSRN:

Benjamin C. Esty (Contact Author)

Harvard Business School ( email )

Boston, MA 02163
United States

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