Public finance comes from a variety of sources, principally taxation but also public borrowing.
Private financing for public infrastructure projects involves government borrowing money from private investors to pay for specific projects.
This is typically done through project finance where a project-specific company is set up to deliver a particular infrastructure project. That company then borrows the money and contracts typically transfer responsibility for designing, building, operating and maintaining an asset to these companies in which investors have managerial responsibilities. A well known form of project finance were the public-private partnerships (PPPs).
Government infrastructure and capital projects are challenging and require a new approach. New funding techniques must be implemented with an enhanced visibility into schedule and quality.
Confidence is key for potentially risky mega-projects.
The worlds public infrastructure is aging,
and it will require a huge investment to
renovate or replace it. In fact, i.e. in the United
States it is estimated that a $2 trillion
investment will be necessary by 2025 for new
and upgraded infrastructure across the country.
This eye-opening level of need continues to
drive the public sector’s focus on infrastructure
projects that produce high levels of financial
value and public benefit.
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