PPP Consultants
Five capital pools — why no project should depend on one lender
One lender’s best offer is not a market price, and a sponsor with a single term sheet has no way to tell the difference. The United Kingdom, Europe, the Middle East, Asia and Africa each lend to infrastructure on their own terms; the sponsor who can reach all five sets the price, and the sponsor who can reach one takes it.
PPP Consultants · September 2026
Every infrastructure project of scale is financed from somewhere, and where it is financed from decides what it costs. For most of the past forty years the answer, for a sponsor in the United Kingdom or in southern Africa, was a short list of familiar banks and one development finance institution.
That is no longer the market. Five distinct pools of capital now lend to infrastructure, each with its own appetite, documentation and price, and each active in the markets the firm works in. This article describes the five, what each will and will not finance, and why the discipline of reaching more than one is the single largest lever a sponsor has on the cost of capital.
Why five, and why it matters.
A lender prices to its own cost of funds, its own appetite for the sector, and the competition it can see in front of it. A sponsor who takes the financing case to the one institution it knows receives that institution’s price — margin, tenor, cover ratios, security package — and never learns what the market would have offered. Until a competing offer is on the table, there is no benchmark.
The capital available to infrastructure is not one market, and it is large. Private investment commitments to infrastructure in low- and middle-income countries reached US$100.7 billion across 315 projects in 2024, according to the World Bank, 16 per cent more than the year before; Sub-Saharan Africa’s share more than doubled to US$7.9 billion across 47 projects.
Unlisted infrastructure funds alone held US$335 billions of committed but uninvested capital at Preqin’s last published count — a record low as a share of the asset class, at 24 per cent of assets under management against 35 per cent at the end of 2020, on Preqin’s own figures. A fund that does not invest does not earn, so that capital must compete for projects.
It cannot compete for a project it is never invited to price. McKinsey has estimated that international investors could direct as much as US$550 billion to African infrastructure alone.
Those pools do not price alike, and they do not all look at the same project. Moody’s study of 7,354 project finance loans between 1983 and 2018 found a ten-year cumulative default rate of 5.0 per cent and an average recovery of 81.5 per cent when default did occur: the asset class is safe enough that lenders will compete for a well-prepared project, and the sponsor who creates the competition captures the difference.
On an availability-based PPP with a 25-year payment stream, every basis point conceded is paid on every drawn dollar, every year, for the life of the debt.
The United Kingdom.
The United Kingdom ran the first national PPP programme, and its banks wrote the documentation the rest of the world adopted.
What the pool brings is mature project-finance documentation, senior-debt appetite calibrated by hundreds of closed transactions, mezzanine and infrastructure-fund lenders for the layers above senior debt, and a secondary market that lets a bank lend knowing it can sell.
What it asks for is a structure it recognises: availability-based or contracted revenue, a risk matrix in the standard form, a model built to be tested. Sponsors who present that structure find the United Kingdom pool the quickest to price.
Europe.
The European pool has two parts. The first is the commercial project-finance banks, which lend on terms close to the United Kingdom’s and with the same documentation.
The second is the policy lenders — the European Investment Bank, the European Bank for Reconstruction and Development and the bilateral development finance institutions — which bring concessional terms attached to development objectives and a due-diligence standard that commercial lenders will rely on.
A policy lender at the table lowers the price the commercial lenders quote, because it has already done the work they would otherwise price for. The pool asks for European procurement discipline: a competitive process, documented, with the environmental and social assessment done to its standard.
The Middle East.
Gulf capital has become one of the largest sources of infrastructure finance in the world and one of the least understood by sponsors outside the region. It comes as sovereign wealth, institutional investment and regional bank lending, and it has structural preferences: an appetite for equity alongside debt, a preference for assets of scale and long life — ports, power, water, transport — and documentation in the form its institutions recognise, which the firm drafts to Islamic Bank requirements as a standing discipline.
The pool is quick to decide and long in its commitment, and it asks for one thing above all: a counterparty that understands its documentation before it arrives. The firm’s bases run two to three hours behind Gulf Standard Time, so every Gulf working day is covered.
Asia.
Asian capital comes in two forms. Commercial banks — Japanese, Korean, Chinese, Singaporean — lend competitively where a sponsor or contractor from their home market is in the project, and their pricing reflects that relationship.
Policy lenders — the export-credit agencies and development banks — bring infrastructure-focused capital within bilateral cooperation frameworks, often tied to the procurement of equipment or construction from the lending country. The pool asks for a project with a home-market participant and a procurement structure that accommodates one; where that fit exists, the pricing can be the most competitive of the five.
Africa.
The African pool is the one most often misread. It is not small: the African Development Bank, the regional development finance institutions, national development banks, government funding departments and the commercial banks of South Africa, Namibia and their neighbours all lend to infrastructure, and grant and concessional facilities exist for projects with the structure to attract them.
What the pool asks for is a bankable structure and a demonstrable development impact — jobs, access, resilience — evidenced rather than asserted. Its role in a financing is usually to anchor: a development-finance institution in the senior tranche is the signal that brings the other four pools to a project in Africa. Direct working relationships with African ministries, parastatals and the regional lending community are what turn that anchor from a possibility into a term sheet.
The discipline of reaching all five.
The discipline is to run the raise as a competition. Build the information pack so that each class of capital can read and price the same project: commercial banks, infrastructure funds, development finance institutions, export credit agencies. The project does not change.
The documentation decides who can bid. A financing case written for one class of lender reaches one class of lender, and the sponsor pays that class’s price.
A sponsor who approaches five pools, each with documentation prepared to that pool’s own diligence standard, gets competing terms for the same mandate, and the structure that results is usually a combination: a development-finance anchor, commercial senior debt from two pools, and equity or mezzanine from a third.
The work is in the preparation. Each pool has its own information requirements, its own model conventions, its own environmental and social standards and its own documentation; a single information memorandum does not serve all five. This is why the firm maintains five lender and investor networks and structures each financing case so that every pool can price it: not to find capital, but to make capital compete.
The firm’s record across the pools.
The firm raises senior debt and equity across all five pools, for any company whose scheme can demonstrate commercial viability, whether or not it is also engaged on the procurement.
More than US$1 billion + has been raised to date, with competing terms sourced from multiple lenders for the same mandate. The record spans closes in eight sectors — education, health in two jurisdictions, policing, justice, civic and community, and transport — and is carried today into southern Africa, the Gulf and markets beyond, with a live energy transaction of some US$400 million, a first-of-kind national facility, and a live water bid of US$80 million on the contractor side.
One entry in the record is advice not to proceed: where PPP was not the right answer for a transport project, the firm said so and secured the grant and conventional-contract route that was available. The register of transactions is available on request.
What to do differently.
A sponsor planning a financing should begin by asking which of the five pools fit the project, and why, before asking any lender for a price. It should prepare its information memorandum, model and risk matrix to the standard of the most demanding pool it intends to approach, so that the others are served by the same file.
It should seek a development-finance or policy anchor wherever the project qualifies, because that anchor lowers every other lender’s price. Then it should approach the pools together, not in sequence, and let competing terms set the price. The alternative is to take the first offer, and the first offer is never the best.
Sources: World Bank, Private Participation in Infrastructure Annual Report 2024. Preqin, 2025 Global Report: Infrastructure, December 2024. McKinsey & Company, Solving Africa’s infrastructure paradox, March 2020. Moody’s Investors Service, Default and recovery rates for project finance bank loans, 1983–2018.