This research paper aims to bring out the characteristics of project finance transactions in the Middle East and the growing role of Islamic Finance in these transactions. Drawing from various professional and academic sources, this paper will attempt to describe the advantages as well as shortcomings and aim to show the uniqueness of the capital structures in the region. The different Islamic Finance structures will be described and the role of each structure will be explained. Going further, the paper will intend to discuss the risks that are associated with project finance in the region. The research analysis framework will focus on financial structures unique to the region and the economic environment in this region that defines the elements of these unique structures.