logo

Scientific Papers

Vol. 19 No. 34 (2017): Journal 34

The concepts of funding and financing when developing projects through public private partnerships (PPP)

DOI:
https://doi.org/10.15517/698a0336
Submitted
November 13, 2025
Published
2025-11-13

Abstract

The main objective of Public Private Partnerships (PPP) models is to generate efficiency gains throughout the project lifecycle. However, in a budget- constrained environment, PPPs are viewed as a tool for developing the projects which the government able to finance. That said, it is important to distinguish the concepts of project funding and project
financing.
Funding refers to the sources of income to repay for the project investments during its life: taxes and tariffs. Financing refers to money invested. Broadly speaking, financing could take the form of public debt, private debt or private equity. Therefore, private money is not "free money" and funding will be needed to repay for it. Having a clear understanding of these elements is crucial within the decision-making process in public infrastructure development.

References

  1. Boyer, M., Gravel, É. & Mokbel, S. (2013). The Valuation of Public Projects: Risk, Cost of Financing and Cost of Capital. Ontario, Canadá. C.D. Howe Institute.
  2. Banco Mundial, Banco Asiático de Desarrollo & Banco Interamericano de Desarollo (2014). Public Private Partnerships: Reference Guide Version 2.0. Washington DC, Estados Unidos.
  3. Correa, G. & Rozas, P. (2006). Desarrollo urbano e inversiones en infraestructura: elementos para la toma de decisiones. Santiago, Chile. Serie DRNI No 108. CEPAL.
  4. European PPP Expertise Centre (2016). Hurdles to PPP Investments: A Contribution to the Third Pillar of the Investment Plan for Europe. Luxemburgo, Luxemburgo. European PPP Expertise Centre.
  5. European PPP Expertise Centre (2011). A Guide to Guidance: Sourcebook for PPPs. Luxemburgo, Luxemburgo. European PPP Expertise Centre.
  6. Eurostat (2016). A Guide to the Statistical Treatment of PPPs. Luxemburgo, Luxemburgo.
  7. Gatti, S. (2013). Project finance in theory and practice: designing, structuring and financing private and public projects. Estados Unidos de América. Academic Press.
  8. Global Association of Risk Professionals -GARP- (2017). Foundations of Risk Management. Nueva York, Estados Unidos.
  9. HM Treasury (2013). The Green Book: Appraisal and Evaluation in Central Government. Londres, Inglaterra. Gobierno del Reino Unido.
  10. HM Treasury (2013). Public Sector Business Cases: Using the Five Case Model. Green Book Supplementary Guidance on Delivering Public Value from Spending Proposals. Londres, Inglaterra. Gobierno del Reino Unido.
  11. Infrastructure Australia (2008). National Public Private Partnership Guidelines. Volume 2: Practitioners’ Guide. Canberra, Australia. Gobierno Australiano.
  12. Infrastructure Australia (2008). National Public Private Partnership Guidelines. Volume 3: Commercial Principles for Social Infrastructure. Canberra, Australia. Gobierno Australiano.
  13. Infrastructure Australia (2008). National Public Private Partnership Guidance. Volume 4: Public Sector Comparator Guidance. Canberra, Australia. Gobierno Australiano.
  14. Infrastructure Australia (2008). National Public Private Partnership Guidance. Volume 7: Public Sector Commercial Principles for Economic Infrastructure. Canberra, Australia. Gobierno Australiano.
  15. Infrastructure Australia (2012). Australia’s Public Infrastructure: Part of the Answer to Removing the Infrastructure Deficit. Canberra, Australia. Gobierno Australiano.
  16. Infrastructure Ontario (2007). Assessing Value for Money: A Guide to Infrastructure Ontario’s Methodology. Ontario, Canadá. Gobierno de Ontario.
  17. Naciones Unidas (2008). Guidebook on Promoting Good Governance in Public-Private Partnerships. Ginebra, Suiza. Naciones Unidas.
  18. Organisation for Economic Co-Operation and Development (2007). OECD Principles for Private Sector Participation in Infrastructure. París, Francia. OECD.
  19. PPP Canadá (2013). Identifying P3 Potential: A Guide for Federal Departments & Agencies. Otawa, Canadá.
  20. Weber, B. & Alfen, H. (2010). Infrastructure as an Asset Class: Investment Stretegies, Project Finance and PPP. West Sussex, Reino Unido: Wiley

Downloads

Download data is not yet available.