Can a project be financed with 100% equity?

A project can indeed be financed with 100% equity, meaning that all the capital required for the project comes from equity investors rather than debt financing. This is typically characterized by ownership stakes in the project being sold to investors, who expect a return on their investment through profits or dividends rather than through interest payments, as is the case with debt financing.

Financing a project entirely with equity can be beneficial for several reasons. It allows for greater financial flexibility since there are no mandatory debt repayments. Furthermore, it may lower the financial risk since the company does not incur debt obligations that must be repaid regardless of the project’s performance. This approach is often seen in startups and new ventures where establishing a credit history might be challenging, but it is not limited to them.

In a more mature business or project, relying solely on equity can signal confidence in the project's potential, attracting investors who are willing to invest without the security of debt. Thus, the statement that a project can be financed with 100% equity is valid and reflects a strategic choice in financing.