Financing Sources
Revenues are a critical component of any financial model, providing the income streams necessary to ensure the viability and sustainability of a project. In infrastructure projects, revenues can come…
Blended finance is a way to improve risk-adjusted returns and mobilize private capital to close infrastructure financing gaps. Sustainable, optimal, and innovative strategies can increase private…
Blended finance is a strategic approach that combines public and private funding to mobilize private capital flows towards emerging and frontier markets. It aims to attract commercial capital to…
The exclusive use of private finance is not a defining characteristic of a PPP—governments can also partially finance PPP projects. Reducing the amount of capital investment needed from private…
When a PPP involves private finance, the investor typically has primary responsibility for developing the finance structure of the project. Nonetheless, government may need to influence its design.At…
Infrastructure investment is typically under-funded—that is, most countries are not investing enough to meet strategic objectives, such as universal access or poverty eradication. This suggests that…
SubsectionsFinance Structures for PPPConsiderations for GovernmentThe Role of Public Finance in PPPsThird Party Risk Mitigation and Credit EnhancementKey ResourcesHow PPPs Are FinancedFarquharson,…
Further Reading and ResourcesProject Development Funds, a primer published by The World Bank, 'Project Development Funds (PDFs) - Supporting Project Preparation to Structure Successful Public-…
Certainty of Revenue StreamAs noted above, the project is unlikely to generate revenue until the operations period and so it is going to be key to lenders and other investors that the revenue stream…
Typical Project Finance StructureThe typical project financing structure (simplified for these purposes) for a build, operate and transfer (BOT) project is shown below. The key elements of the…
A key motivation for governments considering public-private partnerships (PPPs) is the possibility of bringing in new sources of financing for funding public infrastructure and service needs.This…