When it is about raising the infrastructure debt fund or selling them later for recycling the capital through the different market routes like IPO, the information about that particular project should be given to the capital market. This information may be about the rivals of that project, the sponsors, etc. In the route of project financing, the sponsors may share such information with the investors and also negotiate the price for the project without making the proprietary information public. Since investors have a financial say in any project, it is also beneficial for them to keep the information confidential.

A Complex Procedure

Apart from all these advantages of infrastructure equity funds, project financing is considered to be complex as well as a costly structure to be built. The cost of the capital which is arranged through conventional routes is a little high. The process of project financing is complex because of the need for structuring the contracts which need to be negotiated by different stakeholders of the project. It also increases the cost for transactions for legal expenses which are a part of the process of designing the structure of the project, dealing with the tax as well as legal issues of project and preparation of important ownership of the project, documentation of loan, other contracts, etc. All these things are quite crucial for the financing of any project like oil and gas finance.

Sharing the Risk

This is the biggest advantage of project financing. There are a lot of risks in any project and these risks are shared when you seek project financing from different sources.