Attracting private nancing is high on the agenda of policy makers concernedwith closing the infrastructure gap in developing countries. To date, however, private nance represents a minor share of overall infrastructure financing and the poorest countries struggle to attract any private investors. This paper develops a model that rationalizes these facts. We characterize the structure of financial and regulatory infrastructure contracts and derive conditions under which public and private finance coexist. This requires a combination of regulated prices and public subsidies sufficiently attractive for outside nanciers pointing at a fundamental trade-off between financial viability and social inclusion. While improvementsin the efficiency of bankruptcy procedures facilitate access to private finance, institutional changes l owering the cost of public funds make public finance more attractive.