For an extended discussion of the differences between PAYS and leasing models, please refer to the instrument analysis by the Global Innovation Lab for Climate Finance (Annex 7.3).
- Additional liabilities: Leasing agreements require the bus service provider to accept a long-term future liability on their balance sheet. By contrast, a PAYS transaction does not impose additional liabilities on a bus service provider’s balance sheet.
Cost recovery: Leases depend on the creditworthiness of the bus service provider. With PAYS, utilities rely upon disconnection for non-payment, which is an effective form of security.