Lesson 5 of 7 · 13 min
Infrastructure: assets, cash flows and categories
Infrastructure assets are capital-intensive, long-lived facilities that deliver essential public services, are paid for mainly through contractual payments rather than tenant leases, and are classified as economic (transport, ICT, utilities and energy) or social (schools, hospitals and the like).
In short
- Infrastructure is real, capital-intensive and long-lived, intended for public use and essential services: roads, airports, utilities, telecom networks, hospitals.
- Like real estate, existing assets are unique and illiquid; new projects aim to earn income or capital appreciation.
- Cash flows come mainly from contractual payments: availability payments, usage-based payments (tolls, fees) and take-or-pay arrangements.
- Most infrastructure is financed, owned and operated by governments, but private finance through public-private partnerships (PPPs) is growing; development finance institutions also co-invest.
- Broadest split: economic infrastructure (transport, ICT, utility and energy) versus social infrastructure (education, health care, social housing, correctional and government buildings).
Unlock this lesson free for 7 days
Create a free account to get 7 days of full access — every lesson, video, flashcard, mock and the question bank. No card needed.