After estimating the funds required for the project, the next important issue that needs to be addressed is to estimate the optimal mix of debt and equity. The optimal debt/equity ratio depends on expected profitability of the project, the risk profile of the project, adequacy of the project security arrangements, and creditworthiness of the parties. Lenders will make their own assessment of the strength of the credit support, and revenue potential of the project and based on it they will limit their project leverage accordingly. The financing plan also needs to make arrangement for outside equity investors in case the sponsor is not willing to provide the equity as per the maximum feasible debt/equity ratio.

With respect to the cost of construction of the project facilities, the commitments from providers of equity capital and debt should be coordinated with the project sponsor's commitment to contractor for construction expenditures, as construction cannot commence until the commitment for the entire amount of funds required to complete the project has been obtained. The providers of equity capital and debt funds, however, have different willingness to enter into forward commitment to provide the funding for the project. The commitments are in the form of contractual undertakings by financially capable investors to provide the required amount of equity. Similarly, commitments must be obtained from banks and lenders for the debt portion of the funding.

The timing of drawdown of equity and debt is another factor that needs to be looked into while designing the financing plan. Lenders normally require the equity investors to invest a certain amount of equity prior to initial drawdown of debt fund. The expenses incurred during the development phase of the project are normally funded with the equity investment. Or, the lenders will insist debt and equity should be drawdown in some specified proportion. In addition to the timing relating to commencement of debt drawdown, the time period over which the lenders will be willing to commit the funds to the project will again depend on prevailing market conditions and lending practices.

The financing plan developed for the project should also need to ensure that maturity profiles of the funds raised for the project match the expected project cash flow profile. The expected project cash flow profile will determine what debt repayment schedules are feasible.