With contributions from Joey Suri, Project and Infrastructure Partner, Gowling WLG

Introduction

Public owners are changing how they procure and deliver complex infrastructure. Collaborative models (alliance contracting, integrated project delivery, and progressive design-build) are displacing adversarial, fixed-price procurement on high-risk projects because they reduce disputes, enable innovation, and optimize whole-of-life outcomes. Canada’s infrastructure investment gap spans transit, energy transition assets, and healthcare facilities, precisely the project types where collaborative delivery has shown its value. These models align incentives and share risk among participants while preserving competitive tension to protect value for money.

At the same time, the scale and cost of modern infrastructure demand private capital. Traditional project finance, namely non-recourse lending to a special purpose vehicle secured against the project's future cash flows, remains the primary tool, but it depends on fixed-price certainty, discrete risk allocation, enforceable step-in, and defined remedies. Those requirements are not easily reconciled with collaborative delivery.

This article examines that tension and tests where it can be reconciled in practice. After defining bankability and outlining the collaborative models, the article looks at the principal frictions and the structuring responses available in Canadian practice, including public balance-sheet solutions, targeted backstops, Progressive P3, Alliance PPP, and practical contract modifications. No single tool resolves all tensions, as only a calibrated package, informed by mixed-finance concepts and tailored to the project can produce a workable result.1

This article does not purport to address exhaustively all bankability risks and issues that arise in the financing of collaboratively delivered projects, nor does it catalogue every available option or solution for addressing them. The structures and strategies discussed herein are illustrative rather than prescriptive, as each project will present its own unique constellation of risks, stakeholders, and constraints that demand bespoke solutions. This article should be considered as a framework for analysis, not an exhaustive catalogue. Project-specific legal, financial, and commercial advice remains essential.

[1] For simplicity, the differentiating elements of collaborative delivery and traditional project finance are presented here in their most distinct forms.

Table of contents

  1. Introduction
  2. Why does financing remain necessary under collaborative delivery?
  3. What is bankability? 
  4. What are the collaborative delivery models? 
  5. Core principles of collaborative delivery models 
  6. Core principles of traditional project finance 
  7. The issues between collaborative delivery models and traditional project finance 
  8. Available solutions and potential structuring 
  9. Conclusion