The project finance industry is undergoing dramatic changes. Demand for global infrastructure investments is growing rapidly, but privatization, deregulation, and competitive pressure in most industries has created more uncertainty about the future development of cash flows. Projects with carefully crafted contracts, which in the past served as the basis for stable, long-term financing, are being replaced by assets that are exposed to market and price risks. This often leaves gaps in capital structures that cannot be filled effectively by conventional financing sources. By contrast, sophisticated insurance companies with dynamic risk modeling capabilities and highly rated balance sheets have a proven ability to offer financing support in these types of situations. This article describes how insurance is used as financial risk capital in various project finance transactions—well beyond its more traditional reach in areas such as property, casualty, and political risk coverage.