Project Finance International or Private Equity: Which one should you choose?

If you belong to the finance stream, you’ve probably heard of project finance international and private equity consulting. So, what is it? How are these streams different? Let’s learn.

Defining Project Finance Vs. Private Equity

Project finance international is typically used when a company decides to start a new project – renewable or industrial project. At the start of a project, adequate funding is needed. Sponsors and financers observe the cash flow of a project and invest based on that. If, however, the project cash flow is not as predicted, sponsors and financers take over the assets of the project.

Contrarily, private equity is a completely different thing. It deals with four functions – fundraising, screening, investment portfolio, and exit strategy analysis. Private equity consultancy associated should be proficient in financial models. They must also possess in-depth knowledge of investment and be aware of the trending market changes.

What would you study – Project Finance or Private Equity

Project finance can be defined as the trick to finance a project from various fund sources. On the contrary, private equity is all about investment analysis wherein you are a part of the firm where multiple investors come together and invest in a business. However, private equity consulting firms suggest that you should only invest in businesses with higher ROI.

While these two subjects are largely different, there are some similarities in knowledge and concept. Moreover, both these domains are prevalent in the world of business.

Crucial Concepts

Project Finance Concepts Include

#Project development#Sponsors#Lenders#Financial advisors#Technical advisors#Debt financer#Legal advisor#Regulatory agency#Multilateral agency#Documents – Shareholder/sponsors, finance, project related#Finance Models

Private Equity Consultancy concepts include

#Private equity investors#Angel investors#Venture capitalists

Final Word

The key difference between project finance and private equity lies in the context. While project finance helps businesses and projects thrive, private equity helps businesses to make it to the top. The private equity investors finance any project. Therefore, there is always a direct connection between private equity and project finance as both serve the same purpose. Private equity is not just limited to project finance. Investors can invest in start-up or thriving businesses depending on the idea and its marketability.

Imci Group is one of the famous project-financing companies providing solutions for institutions, financial professionals and millions of individuals worldwide.