Mechanisms for protecting returns on private investments in public infrastructure projects

Hatice Cigdem Demirel*, Wim Leendertse, Leentje Volker

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

6 Citations (Scopus)
22 Downloads (Pure)


Despite the widespread attention for the private financing of infrastructure projects, actual empirical work on financing public-private partnerships remains limited. Especially the topics of return on equity and lenders’ cash flow control in relation to uncertainty are under-researched. The aim of this paper is to investigate and discuss the mechanisms applied by private financiers of infrastructure projects to protect their returns on investment. Using semi-structured interviews, the qualitative viewpoints of infrastructure financiers and their consultants on infrastructure investment are examined. The findings identify nine control mechanisms that financiers apply, including a range of asset and risk diversification portfolio strategies for their infrastructure investments, and reveal that they depend on governance mechanisms relating to the project environment, relations, knowledge and expertise. Hence, this study provides a better understanding of the actions and mechanisms applied to protect a return on infrastructure investments that leverage partnering strategies between public authorities and private investors in public infrastructure projects. This contributes to the debate on project financing under uncertainty and its implications for project governance in public private partnerships.

Original languageEnglish
Pages (from-to)155-166
Number of pages12
JournalInternational journal of project management
Issue number3
Publication statusPublished - Apr 2022


  • Control mechanisms
  • Governance
  • Infrastructure projects
  • Project finance
  • Public private partnerships
  • Return protection
  • UT-Hybrid-D


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