Infrastructure carries more debt than any other private asset class because lenders size against contracted cash flow, not an earnings multiple. This page shows the machinery: CFADS, a target coverage ratio, a sculpted amortisation profile, and the refinancing that returns equity early, all on a live model.
A corporate lender asks "how many turns of EBITDA?". A project-finance lender asks a different question: how much debt service can each year's cash flow cover, with a cushion? Start from CFADS, cash flow available for debt service (EBITDA less tax, working capital and maintenance capex, before interest), divide by the target DSCR, and that is the debt service the asset can carry each year. The present value of that stream at the loan's rate is the debt capacity. When cash flows grow along the contract, letting the debt service grow with them, sculpting, raises capacity materially versus a flat annuity sized off the weakest year. That arithmetic, plus the coverage cushion the revenue model justifies, is nearly all of infrastructure debt.
Toggle sculpted to level annuity and watch capacity fall: a flat payment must fit under the weakest year, so every later year's growth is wasted headroom. Sculpting is why availability PPPs and regulated assets, whose cash flows are contractual and indexed, can gear to 80–90% of cost, while a merchant asset with the same average CFADS cannot. The gap between the green bars and the stacked debt service is the coverage cushion, the buffer that absorbs a bad year before the lenders' cash sweep triggers: distribution lock-up typically sits around 1.10–1.20× and an event of default nearer 1.05×.
The refinancing release is the quiet engine of levered infrastructure returns. Once construction risk is gone and the asset has a trading history, the same CFADS supports cheaper, and often more, debt. Re-sculpting the remaining cash flows at the new rate versus the balance outstanding is exactly what the model's refi line does, and that surplus is returned to equity years before exit. On long concessions, a "mini-perm" structure plans this from day one; the M&A module shows the same effect inside a full acquisition model.
Illustrative model. CFADS is taken as given and grows at a constant rate; real financings sculpt against a lender base case with P50/P90 downside tests, DSRA and MRA reserve accounts, sweep triggers and hedging. The refi line re-sculpts the remaining CFADS at the new rate over the original tenor. LLCR under pure sculpting equals the target DSCR by construction, a useful check that the two ratios are measuring the same cushion in different ways. Figures are generic $m; not investment advice.