Pay-as-you-use financing refers to what method of funding?

Pay-as-you-use financing is a method that links the repayment of financing to the actual usage of a project or service. This approach typically involves funding projects through debt that is repaid as the services or benefits are utilized. In other words, the expenses associated with the project align with the revenues generated or savings realized as the project is used. This model is especially relevant in public finance, where municipalities might need to invest in infrastructure or services that will provide benefits only over time, allowing them to finance the initial investment while relying on future revenues to cover the costs.

This method emphasizes a direct correlation between usage and payment, which helps municipalities manage their cash flows more effectively and aligns the funding strategy with the actual benefits derived from the project.