What is an availability payment?

Payments are usually made on a set schedule over a long concession, and they are reduced when the project is unavailable or falls short of agreed standards. They are common in public-private partnerships for roads, hospitals and other public assets. The company carries construction and operating risk rather than the risk of how many people use it.

Say a road earns $60 million a year in availability payments. If traffic halves, it still earns $60 million; a toll road on the same terms would fall to $30 million.

It trades traffic or demand risk for a government’s promise to pay, giving steadier income with less upside.