How Large Infrastructure Projects Are Financed

Apr 30, 2016

How Large Infrastructure Projects Are Financed

How Large Infrastructure Projects Are Financed

Posted in : Business Advice, Business General Interest on by : Josh

The way large projects are financed is a proves that varies greatly between countries. In the UK for example, most project financings have been carried out under the Governments private finance initiative. This means that the private sector can obtain finance, usually from a bank, to design, build and operate a large infrastructure project.

In return, the public sector grants this private sector partner a long-term contract to run the facility which is usually for 25-30 years.

In developing countries and emerging markets, other factors come into high consideration. Here risk identification and allocation becomes a key component of project finance. As a project may be subject to a number of technical, environmental, economic and political risks.

Examples of some of the large projects that are commonly employed using this scheme involve, government buildings, transport systems, sports stadiums and natural gas development projects.