Here's what the glossary says:

A better way would be to say that it is the intention of all the participants (at the outset of the deal) to structure a financing whereby recourse from the sponsors will be deliberately released as soon as the project cashflows can be shown to meet the original expectations.  Even better is to see the advanced definition in the new book, Advanced Project Financing: Structuring Risk, 1st Edition.

RISK SHARING (The 16 Risks)

The main attraction of Project Financing is the ability to pass on certain risks to the lenders, although this has a perceived cost (risk premium) and lengthens the negotiating process. It is possible to use Project Financing to isolate a specific project from the ongoing business of the company and thereby not jeopardise the debt capacity of the organization. For example, a very large, new project which is bigger than the existing total business of the company would be an ideal candidate for Project Financing. Another example of a successful application of Project Financing is where more than one project is being developed at the same time. A further example is where a Project Financing is arranged from an existing venture to generate acquisition funds or even develop another project. A Project Financing could first be arranged from one enterprise to develop a second and, a few years later, the first two refinanced to develop a third - sequential Projects Financings building up a portfolio.

The ability to identify and quantify the risks in a Project Financing is pivotal to any understanding of the business. Many risks can be mitigated by financial, contractual, or legal means. Other risks may be sufficiently well studied or accepted. The project developer may have a track record dealing a particular risk. Where there are deficiencies in risk coverage, other supports may be required such as insurances or cash deficiency contracts from the developer. This understanding of risk and risk allocation underpins any worthwhile set of Project Finance documentation.

COMPONENTS

A Project Financing has five components:

1. Cashflow predictions derived from technical, financial, and market studies.
2. Risk allocation agreements through the Project Contracts and Financing Agreements.
3. Funding and repayment mechanisms.
4. Legal security and provision to handle defaults/workouts.
5. Project reporting and compliance.

The project financiers or financial advisers are deeply involved in the first three components to develop a structure and term sheet. The term sheet describes the Project Finance amounts, terms and conditions together with the fees and margins. (Some lenders may have to be repaid before others.) This is then documented in detail. Once the documentation is signed and executed, the funding and repayments are usually handled by an agent or the back office. The final component, compliance and reporting, requires monitoring by specialists in the Project Finance division or through either the agent’s specialists or an independent consultant/engineer.

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