Private finance investors and lenders will focus on both the predictability of cash flows and priority of payments of financial instruments

As with any corporate proposition, expenses and taxes are high in the order of payments and debt ranks above any payments to equity.

Figure 4 shows that, for infrastructure projects, a range of reserve accounts may often be required. These reserves may be for major maintenance of the asset or to deal with changes in law. The requirement for these reserves will come from the lenders and are an additional cost of private finance.

Figure 4: Priority of cash payments