||Public Private Partnership (PPP) means the long term co-operation between public and private sector. The central objective of PPP is to improve efficiency in realising public infrastructure. PPP-projects are characterised by an holistic life cycle approach, which includes one-stop planning, construction, financing, operating and utilisation by a private company. Financing is one of the services that private companies deliver to the public sector within PPP-projects. There are two basic forms of financing used for PPP-projects in Germany. These are: project finance and non-recourse forfaiting of instalments. The typical financing model for PPP-projects in the international PPP-market is nearly exclusively project finance. This comprises the financing of a particular project mainly based on the cash flow of the project. The non-recourse forfaiting of instalments is a special arrangement in Germany. Thereby, the private contractor sells his receivables resulting from the service contract with the public sector to the bank, while the public principal waives an objection to the sold receivables against the bank. In-between these two models a multiplicity of variations of legal arrangements are possible that are adapted to the specific requirements of the project. Which of these forms is chosen to finance PPP-project and how it will be structured depends on the size of the project, the allocation of risks predetermined by the public sector and the legal framework of the specific project. A dynamic PPP market is developing in Germany. Since 2002, about 25 PPP real estate projects with an investment volume of about 600 million Euro have been implemented, while over 100 projects are scheduled at present. The non-recourse forfaiting of instalments was the preferred financing model for most of the implemented projects. In contrast to the international practice, project finance is only used in a few projects. Presently, the question of the appropriate financing form for PPP-projects – project finance or non-recourse forfaiting – is discussed controversially. In this context, many contributions to the discussion are misleading and increases the uncertainty of public principals and private companies. This paper intends to objectify the discussion by providing arguments from the perspective of both the private and the public sector. It shows that a general recommendation for one of both forms cannot be given. In fact, the economic efficiency of the financial model depends on the specific requirements of the project and the public principal. Therefore, an evaluation of each concrete situation is necessary to determine the appropriate model and its structure, in order to reach the main objective of PPP – economic efficiency.