Financing options in PPP projects is similar to the principle of risk distribution. In this definition, both private sector and public is responsible to finance the projects based on the agreements by both parties. Arrangements of PPP financing depends on the policies in each economy. In Canada, financing of PPP projects is 80-90% is funded by debt raised from lenders (usually from bank debt or bond market), while the private sector only contributes about 10-20%. This arrangement aims to ensure private participation in PPP projects, given that sufficient capital is at risk for the private sector consortia to incentivize their involvement in the project and anchor the risk transfer. Substantial payment will be received after projects already operate. In other economies such as Mexico, Malaysia, and China Taipei, the government provides facilities such as subsidies or grant to encourage private participation in financing PPP projects. In the Philippines, Viability Gap Funding is available to solicited project that economically viable but not attractive commercially or financially.
In Papua New Guinea and Peru, private sectors are encouraged to find their own source of fund, usually from capital market or loan from international banks. In some economies, supporting agencies are established with a special task in assist the financing in PPP projects. Indonesia has a dedicated supporting agency to fund PPP projects (PT SMI), a nonbanking financial institution specifically giving funding scheme to infrastructure.