Financial Structuring of Public-Private Partnership (P3) Concessions [fact sheet]

Federal Highway Administration2022PDFBriefUnited States. Federal Highway AdministrationUnited States. Federal Highway Administration. Center for Innovative Finance SupportDeCorla-Souza, PatrickUnited States. Department of Transportation. Federal Highway AdministrationUnited StatesPublic private partnershipsContract administrationInfrastructureProject managementDesign build constructionUnder a Public-Private Partnership (P3) for construction of highway projects, a private partner participates in a long-term contract with a public agency involving some combination of design, construction, financing, operations, and maintenance, including collection of toll revenues. A long-term contract involving financing is a form of highway P3 called a "concession." A concessionaire invests its own funds (known as "equity") and borrows additional funds to pay for construction of a highway project. The concessionaire then maintains and operates the project for a specified period and expects to be repaid for its investment in the project over the period of the concession.143