Which financing tool is specifically intended for public infrastructure and projects?

General Obligation (GO) bonds are specifically designed for financing public infrastructure projects. These bonds are backed by the full faith and credit of the issuing government entity, which means they are supported by the taxing power of that entity. This backing makes GO bonds a reliable source of funding for projects such as schools, parks, and transportation systems, as they can be repaid through tax revenues.

The unique feature of GO bonds is that they are often used to fund essential public services and infrastructure improvements that serve the community as a whole. Because they are financed through taxes, investors typically view them as lower risk compared to other types of securities, making them an attractive option for municipal borrowing.

On the other hand, commercial papers are short-term unsecured promissory notes used primarily by corporations for financing working capital needs. Letters of credit are financial instruments that provide a guarantee of payment between two parties, typically used to enhance the creditworthiness of a borrower. Private equity funds invest in private companies or take public companies private, focusing on returns rather than public infrastructure financing. Thus, these options do not specifically cater to the financing of public infrastructure projects like General Obligation bonds do.