What is an infrastructure concession?

Concessions often set the tolls or fees an operator may charge and the standards it must meet. Because the term is fixed, the value of the rights tends to fall as the end date approaches, unless the term is extended. Political and regulatory change is one of the main risks.

Say a fund wins a 30-year concession to run a toll road. It collects the tolls and maintains the road, then hands it back when the term ends.

It sets how long an investor can earn from the asset and what it is worth at the end, which is often little or nothing.