The design, build, finance and operation of public infrastructure is becoming increasingly dependent on participation of the private sector. An imposing amount of investment involved in a public private partnership agreement places financial institutions in the role of major lenders. The complexity of these agreements creates a gap in the information flow between the public sector, the private sector and financial institutions as project participants. Additionally, the public sector decisions about the network improvement actions add to the complexity of these agreements. The objective of this research is to develop a method which will allow an assessment of the effect that network improvement actions have on the project's financial feasibility. Three common financial instruments were analyzed: bank loans, bonds and real options. Emphasis of the financial feasibility assessment was on the price of the revenue risk, as the most important risk in public private partnership agreements. Results have shown that network improvement actions can have significant impact on the price of the revenue risk. The magnitude of the impact depends on the type of instrument and the position of the road link in the network.
