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This introductory chapter discusses the definition and characteristics of project finance. Project finance deals with the financing of a specific asset in which lenders look principally to the revenues generated by the operation of that asset for the source of funds from which loans will be repaid. Project finance is commonly deployed in the development of large infrastructure projects (e.g. power generation, toll roads, and telecommunications), social infrastructure (such as hospitals and schools), and the exploitation of energy and other natural resources, but it can be used to finance a broad range of assets and services. Common characteristics of project finance include project development through a separate—and usually single—purpose, financial and legal entity; separation of the debt of the project company from the sponsors' direct obligations; and project assets (including contracts with third parties) and revenues being generally pledged as security for the lenders.