As a model of financing of a project, project financing is being widely used in both developed countries and developing countries, especially in case of the capital intensive investment projects. Project financing is superior compared to direct investments and other models of financing, which makes it attractive and appealing way of project financing. Project financing helps putting to use the funds in many infrastructural projects in the different industry fields in both public and private sectors, for the purpose of improving the quality, efficiency and effectiveness of investments. This model takes into consideration only the investment justifiability and the results of projects, not the previous period of the company`s activity. The increasing number of investors in the Republic of Serbia, as well as an increasing demand for investing in industrial and infrastructural projects gave rise to project financing as a model of financing. To make the implementation of this way of financingpossible, the Republic of Serbia created a respective legal framework. Based on the previously mentioned facts, this model of financing could be applied on infrastructural projects, such as transport, energy, irrigation, soil improvement, telecommunications, oil and gas refinement, projects on education and health care, but also on investments in housing and business premises. The purpose of this paper is to point out the potentials of project financing as one mode of financing and its contribution to economic development.

Slađana Benković