The paper covers the analysis of project finance, one of the most effective mechanisms for attracting investments to implement major, complex and expensive projects under high risks and uncertainty. The notion of ‘project finance’ and its key features were redefined by analyzing scientific publications, research carried out by experts and international economic organizations. It was demonstrated that a risk management system, identifying and sharing risks among its participants and assuming the presence of an appropriate security and guarantee package, is an integral element of project finance system. Project finance is characterized by a large number of stakeholders, necessitating organization of an effective system for managing their interests and contracts. Project finance involves a comprehensive analysis, the level of detail of which depends on project scale, possible risks, and social and economic impacts of management decisions. The advantages and disadvantages of project finance were determined in comparison with other financing models with regard to the interests of their participants. A significant share of global project finance market accounts for infrastructure projects, as well as projects in oil and gas production, involving both developed and developing countries. Modern project finance market is characterized by the decreasing share of public funds in financing of major infrastructure projects, including based on PPP principles, continuously improving the mechanism for attracting new sources of financing (infrastructure bonds, etc.). In the Russian economy, project finance is mainly used in large investment projects in oil and gas production, transport infrastructure, electric power industry, etc. Many of these projects are implemented based on PPP mechanism, allowing not only getting the financial resources required, but also increasing the efficiency of utilizing state budget funds, applying advanced production, information and management technologies, professional competencies and skills of private partners, and reducing entrepreneurial investment risks. Effective interaction between the state and private businesses is based on sound legislative base, proven bureaucracy, reasonable return on investment rates, acceptable project payback periods for public and private partners. The research involved analysis and synthesis, comparison, classification, as well as logical and statistical analysis methods. [ABSTRACT FROM AUTHOR]