What Is Bankability?

Financing projects delivered through collaborative delivery models reconciling collaboration with bankability

Bankability is a central concept in infrastructure finance and asks whether lenders and investors will accept a project's risk profile. However, bankability is not a static concept, it fluctuates based on lenders/investors appetite, debt and capital market conditions, counterparty creditworthiness, and the broader macroeconomic and regulatory environment. What is considered bankable in one market cycle or jurisdiction may not be in another. The rising complexity and scale of projects sharpen this test.

Technology, revenue, contractor capability, and sponsor strength drive the bankability outcome. When those elements are credible, more financing options open, which matters when government borrowing and corporate balance sheets are constrained in the current uncertain global environment.

Today, financing modern infrastructure often means a blend of corporate and project finance alongside export credit, insurance capacity, pension capital, development finance institutions, and private debt. Capital-markets instruments (such as corporate hybrid bonds¹) have become relevant additions to the toolkit. Each source brings different risk appetites and prices capital accordingly, enabling an optimized debt stack that envisages full repayment while delivering appropriate returns.

Risk identification and allocation remain critical to any financing. The traditional principle that risks should be allocated to the party best able to manage them has not always produced good outcomes. Recent experience shows that fixed-price construction can misprice inflation, input volatility, and supply-chain shocks. Thin-margin contractors cannot absorb these exposures, and lenders price away from them, shifting risk to taxpayers and users and increasing pressure for regulation and oversight.

Given such tensions, the market has shifted to collaborative delivery models. Collaborative delivery can still be financed, but it requires commercial pragmatism and a willingness by owners, participants, lenders, and equity to move past established orthodoxies. The sections that follow survey the collaborative delivery models before turning to the heart of the analysis: how the core principles of collaborative delivery and project finance diverge, what specific frictions that divergence creates, and what structural and financing options are available to bridge the gap.

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1. Introduction
2. Why does financing remain necessary under collaborative delivery?
3. What is bankability? 
4. What are the collaborative delivery models? 
5. Core principles of collaborative delivery models 
6. Core principles of traditional project finance 
7. The issues between collaborative delivery models and traditional project finance 
8. Available solutions and potential structuring 
9. Conclusion

Footnote

1. Generally, corporate hybrid bonds are capital market instruments which combine debt and equity characteristics and receive partial (or full) equity treatment from rating agencies (as opposed to debt treatment).

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