I agree with your ‘alignment’ comment in particular and I think this is the secret to successful investments; where there is a clear interest in shared interests (and allocation of risk), and I would go a step further, where interests are aligned based on outcome of the investment.

All good points, but you glossed over the strongest feature of the Project Finance solution: equity does not have to sell out, in order to get its money out. Instead, it earns its returns by sharing in stabilized cash flow from programmed performance stabilized by forward commitments from credit-worthy customer or other commercial counterparties. This allows for a better alignment of interests between Enterprise and Investment, especially if those shared interests include sustainability as a core value.

Also, I am not sure I agree with you that Project Finance is any more onerous or time-consuming than any other approach to capital formation for real new value creation. Consider the 300+ questions you identified for evaluating a new venture investment in your blogpost, “A significant business opportunity, or a dog?”.

To be sure, getting liquidity out of an established entity is a different thing. There are so many options for getting liquidity that are familiar and hungry for deals, that a liquidity event can be easy to arrange. Sometimes too easy. As a society, we pay a high price for all the investment liquidity we get from the Banking Industry and the Exchanges. Bringing Investment into Enterprise around real new value creation, however, is a challenge, no matter what techniques and technologies are used to make the connection.

Unfortunately, Project Finance as it is practiced today is largely viewed as an innovative alternative to more traditional forms of government finance. As you stated in your post, the favored assets are governmental or quasi-governmental in nature, and most, if not all, Project Finance deals today feature some form of governmental or quasi-governmental subsidy or support to stabilize Investment return expectations.

So Project Finance is not yet the sustainable alternative to high-liquidity Exchange-based financing solutions for general value creation that we need it to become.

It will get there.

I am Valentina, a member of some financial communities. I came across your website:blog.thefintechgroup.com and found it very informative and helpful. I would like to send you an article as a guest post (relevant to your site).

It will be my pleasure if I can contribute some quality content. Please kindly let me know
how and where should I send you the article.

Waiting for your quick response.

Thanks and regards,
Valentina Allison
[valentina3633(at)gmail(.)com]

visit http://www.thefintechgroup.com/Team/ and submit an Affiliate Inquiry.

Very interested in comparing notes with you on strategies for the expansion of the universe of institutional investors participating in what I am trying to re-position, more generally, as Base Case Partnership financings and Contracted Asset Monetizations.

Tim