Ordinary equity is one of the most common forms of private finance to infrastructure projects. This is one of the most common forms of financing available at the early stage of project lifecycle. Most of the project activities executed in the appraisal stage are financed typically with the equity capital. The return on the equity capital is paid in the form of dividends. Dividends are paid from the retained earnings left after settling the project related expenditures relating to operation & maintenance and paying the debt claims. In worst-case scenario of project failure, nothing would be left for equity investors since priority of dividend payment to equity provider has lowest claim on project cash flows and assets, equity investors therefore demand greater return on equity.

Bonds are another type of financial instruments, which are treated as debt instruments, through which private finance is provided to infrastructure projects through the capital markets. Bonds are considered to be one of the most appropriate financial instruments for financing infrastructure projects as the maturity profile of bonds is in line with the tenure (duration) of the infrastructure projects. The par value, coupon, and maturity are the important characteristics of a bond. The par value is the amount the bondholder will receive on maturity of the bond and coupon is the interest rate at which the bondholders will receive the annual interest income. Different types of bonds are available in the capital market with different arrangements relating to the coupon and par value. The coupon rate in case of floating-rate bonds are linked to short-term interest rate. Such kind of bond helps in mitigating the effects of inflation fluctuations. In case of deep-discount bonds, bondholders are not being paid interest and bonds are being sold at a discount to par value. Income bond is a variant of the conventional bond where the coupon payments are made depending on the borrower's income. Income bonds are a cheaper form of financing from issuer's perspective and issuers are not at default even in the event of financial distress.

Privately financed infrastructure projects are funded using a debt instruments and equity capital in different proportion. The ratio of debt to equity (which is known as capital structure) primarily depends on the risk profile of the projects. Infrastructure projects with less exposure to project risks attempt to opt for a highly leveraged capital structure (high debt to equity ratio). While, in case of projects with high risk profile, lenders are reluctant to participate in the financing and as a result the major portion of the private financing is in the form of equity capital.