Rather than maximizing the amount of private finance in a PPP procurement, the quantitative analysis seeks to optimize private funds based on assessing the amount and cost of private finance, relative to the benefits of encouraging a competitive selection process and achieving effective risk transfer.
The limit at which private finance is optimized in this way is identified through the risk analysis for a specific project by determining the potential for public sector contributions to reduce the overall cost of a project, while ensuring that sufficient at-risk private capital is included to provide the financial incentive to realize the benefits of the PPP.
Public sector funding sources can include federal, provincial and municipal governments, regional hospital districts, authorities, municipalities and non-profit foundations, and are typically included in a project as contributions during construction.