I installed Sydney theme as my wordpress theme yesterday and i wanted to add a new project but i dont seem to find the categories part at the left side of my screen, only the ‘Publish’ and ‘Featured’ part are available. But the categories are only available in the ‘Post’ menu.
Please try to do the following to resolve your issue.
Go to your Dashboard -> Types -> Post Types -> Projects -> scroll to Taxonomies to be used with Project section -> uncheck Categories checkbox -> click Save Post Type -> check Categories checkbox again -> click Save Post Type again.
Please feel free to ask any other questions that you might have.
Kind Regards, Roman.