Analysis of the Capital Structure in Sustainable Infrastructure Systems: A Methodological Approach

Abstract

Many countries require financial mechanisms, leading to increasing coverage through sustainable infrastructure systems (SISs). However, establishing such mechanisms demands innovative approaches and analyses that contribute to the development of financial schemes by providing a new vision for private investors and public entities promoting sustainable development and, therefore, the creation of new eco-financial assets. To address this need, this paper proposes a methodology for analyzing capital structure in sustainable infrastructure systems, which is validated in a case study. Thus, a mathematical model that identifies the impact on the final capital structure according to an investment plan and capital structures per period is developed. Additionally, this proposal integrates a financial framework that involves sustainable financing, capital markets, and public–private sectors. The results of the case study show that debt-service capacity was always higher than 1.0×. Hence, this study provides a better understanding of financing processes for SISs. Additionally, this contributes to the debate on infrastructure financing and its implications for main stakeholders.

The Financing Structure of Global Infrastructure Projects

“…According to Brichetti et al (2021), expenditures on new investments should account for about 60% and expenditures on the maintenance of existing facilities and networks for 40% of total infrastructure investments. The peculiarities of infrastructure investments due to their nature -high capital intensity, long payback period, and public utility -compound the difficulties associated with their selection, design, implementation and, above all, their financing structure and achieving financial closure (Gonzales-Ruiz, Botero-Botero, and Pena, 2022;Thalassinos and Hakim, 2022).…”

Structure of Financing Public Infrastructure Investments – The Case of Poland

“…The specific features of infrastructure investments resulting from their nature -high capital intensity, long payback period, public utility -increase the difficulties associated with their selection, design, implementation, and, above all, with their financing structure and obtaining financial closure (Gonzales-Ruiz, Botero-Botero, and Pena, 2022). The concept of financing structure is generally assumed to be a summary of the share of various financial instruments taking into account their importance in the entire value of the planned investment (Yifu Lin, Xifang Sun, and Ye Jiang, 2009;Esty, 2004;Gebhardt, Ziegler, and Mourant, 2022).…”