Infrastructure finance
Definition
The definition of infrastructure finance is not always clear. It is primarily a type of project finance. Governments are usually the ones that determine which industries can be considered as infrastructure. However, some characteristics are common:
- industries that are essential to the economy (transportation, telecommunications, electricity, etc.);
- industries of strategic importance.
Telecommunications or water treatment projects are common examples. Infrastructure finance frequently involves Public-Private Partnerships, or PPPs, where government entities call upon private lenders to help finance the construction of essential national infrastructure such as fiber-optic networks, water treatment plants, or high-speed rail lines.