Co-financing

Co-financing means, in the PPP context, the provision of finance by the public sector to finance a portion of the capital expenditures (Capex). When the finance is public finance in the strict sense (finance funded by budgetary resources, usually considered “grant payments” or “grant financing”, rather than finance provided by public financial agencies or public banks), it may be named pure co-financing.
Co-financing is commonly associated with unfeasible user-pays projects so as to fill the viability gap, but it can also be applied to government-pays PPPs to increase commercial feasibility, or to increase the affordability of the project.