Abstract: An optimal capital structure can minimize financing cost and maximize project value. Most existing studies have focused on the equity-debt financing mode for public–private partnership (PPP) projects, neglecting the usage of mezzanine financing instruments. To bridge the gap, this study constructs a capital structure for urban water PPP projects that uses mezzanine financing called the Urban Water Project Mezzanine Financing (UWPMF) mode. Based on the requirements of sustainability, qualitative and quantitative methods are comprehensively adopted and validate the model using a PPP sewage treatment project in China. The contributions of the study are twofold. First, the introduction of a mezzanine financing tool in the context of a specific industry enriches theoretical research on PPP project financing. Second, sustainability data is included in the capital structure optimization for specific types of PPP projects, providing reference values for promoting the realization of the sustainability goals of PPP projects.
References：Li, Y.; He, N.; Zhang, Y.; Li, H.; Zhang, C. Optimization of Capital Structure for Urban Water PPP Projects Using Mezzanine Financing: Sustainable Perspective. J. Constr. Eng. Manag. 2023, 149, 04023059.
