Ring-Fenced Revenue Structures in Public Infrastructure
How source-level revenue segregation underpins bankability without sovereign guarantees.
Executive Summary
Ring-fenced revenue structures are a foundational requirement for delivering large-scale public infrastructure without placing pressure on sovereign balance sheets. By legally segregating revenues at the point of collection and assigning them to controlled accounts, governments can unlock long-tenor financing while maintaining fiscal discipline and transparency.
Core Principle
Revenue security must be established at the point of collection, not retroactively through contractual promises.
Structural Requirements
- Legal segregation of revenues via gazette, statute, or regulation
- Assignment of receivables to controlled accounts
- Independent trustee oversight of collections and disbursements
- Pre-agreed payment waterfalls with creditor priority
Bankability Standard
Structures must operate independently of discretionary budget processes and remain enforceable under political or fiscal stress.
Why It Matters
Ring-fencing transforms volatile public revenues into predictable, financeable cashflows, enabling limited-recourse financing without sovereign guarantees.
References
- World Bank (2020) – Private Financing of Public Infrastructure through PPPs
- IMF (2018) – Public Investment Management Assessment (PIMA)
- OECD (2019) – Budgetary Governance and Infrastructure Financing