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Private Finance Initiative - PFI

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Definition of 'Private Finance Initiative - PFI'

A method of providing funds for major capital investments where private firms are contracted to complete and manage the projects. These contracts are typically given to construction firms and last a long time, sometimes up to 30 years. The public services are leased to the public and the government authority makes annual payments to the private company.
Investopedia Says

Investopedia explains 'Private Finance Initiative - PFI'

Private finance initiatives were originally started as part of the British government’s strategy for providing high quality services. A PFI is used when it meets certain requirements and presents a clear value for money and does not surrender any terms or conditions of the workforce.

Road building is an example of a type of project that is frequently used in PFI.

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