Description
Economic growth and development critically depends on the quality of infrastructure. Each aspect of the economy and its infrastructure are linked systemically. Public-Private Partnerships (PPPs) are increasingly being promoted as the solution to the shortfall in financing needed to achieve the Sustainable Development Goals (SDGs). Public-private partnerships enable the public entity to utilize the expertise and efficiencies of the private sector to deliver services and facilities that traditionally have been delivered by the public sector, either through public sector employees or by traditional procurement methods. To be beneficial to all stakeholders, a PPP project requires careful planning, implementation, and strong governance. This book breaks down the steps involved and the traps to circumvent. Despite its globally growing importance, project finance has been somewhat underrepresented in research. This book analyzes project finance from an interdisciplinary perspective-finance, management, and international business-and includes international laws of arbitrage and perspectives of international financial institutions as never endeavored by any previous research projects. The book also includes case studies assessing the relevance of private-public partnerships by comparing the country expectations and the real outcomes. The gap between expectations and results does not necessarily mean that significant progress has not been made. To the contrary, the book suggests that some of the original targets set may have been unrealistic, and that the requisite financial resources-or the financial sector policies that could have generated those resources-may have been lacking. Chapter 1: Introduction to Project Finance 1.1 General 1.2 Characteristics of project Financing 1.3 Public-Private Partnership Framework 1.3.1 PPP Policy PPP Rationale PPP Scope PPP Implementation Principles PPP Governance Arrangements Chapter 2: Project Financing and Direct Conventional Financing 2.1 General 2.2 Corporate Finance 2.3 Traditional Procurement 2.4 Project Finance 2.5 Advantages and disadvantages of project finance 2.5.1 Advantages 2.5.2 Disadvantages 2.6 Evolution of project finance 2.6.1 The Extractive and oil Industry 2.6.2 The Natural Resource Industry 2.6.3 The Power Industry & Beyond Chapter 3: Sources of project funds 3.1 General 3.2 Sources of Funds Syndicated Commercial loans Bridge finance Bonds and other debt instruments Stapled Financing Equity finance Mezzanine Loan Hybrid Instruments Pension funds Government grants 3.3 Project Financing Participants Project sponsors or owners Project company Contractor Operator Supplier Customer Multilateral agencies Export credit agency Legal advisers The trustee Insurance Companies 3.3 Public-Private Partnerships 3.4 Structuring Project finance Chapter 4: Bankability 4.1 General 4.2 Bankability Assessment 4.2.1 Certainty of Revenue Stream 4.2.2 Risk Factors 4.2.2.1 Political Environment 4.2.2.2 Economic Environment 4.2.2.3 Legal System 4.2.2.4 Regulatory Framework 4.2.2.5 Environmental Risk 4.2.2.6 Project Specificity 4.2.2.7 Project Financial Structure 4.2.2.8 Third Party Risk Allocation 4.2.2.9 Contract Agreement 4.3 Bankability Tradeoff Chapter 5: Public Procurement: Laws and Regulations 5.1 General 5.2 Public Procurement Legal Framework The Constitution National Procurement Laws Procurement Regulations 5.3 Principles of Public Procurement 5.3.1 Transparency 5.3.2 Integrity 5.3.3 Efficiency 5.3.4 Fairness 5.3.5 Openness 5.3.6 Competition 5.3.7 Accountability 5.4 Public Procurement Cycle 5.4.1 Competitive Tendering 5.4.2 Pre-Qualification of Bidders 5.4.3 Processing and evaluating bids 5.4.4 Making award recommendations 5.4.5 Negotiating contracts 5.4.6 Contract award letter and signing the contract. 5.5 Public Procurement laws in the US, EU, and China 5.5.1 Public Procurement laws in the United States 5.5.2 Public Procurement laws in the European Union 5.5.3 Public Procurement laws in China Chapter 6: Assessment of project’s viability and analytical tools 6.1 General 6.2 The Procurement Process 6.3 The Six Assessment Areas 6.3.1 Project Identification and PPP Screening 6.3.2 Appraisal and Preparation Phase 6.3.3 Structuring and Drafting Phase 6.3.4 Tender Phase 6.3.5 Contract Operational Management 6.3.6 Contract Finalization Management 6.4 The Analytical Tools: Infrastructure Prioritization Framework 6.4.1 Infrastructure Prioritization Framework Social Cost Benefit Analysis Multi-Criteria Decision Analysis (MCDA) Chapter 7: The Identification and Management of Risks 7.1 General 7.2 Identification of Projects: Project cycle Identification Preparation Appraisal Negotiation/Approval Implementation/Support Completion/Evaluation 7.3 Risk Assessment 7.3.1 Risk Identification Country risk Political risk Industry risk Project risk Customer risk Supplier risk Sponsor risk Contractor risk Operating risk Product risk Environmental risk Competitor risk Funding risk Currency risk Interest rate risk 7.4 Risk Allocations 7.4.1 The Project sponsor 7.4.2 The Lenders 7.4.3 The Contractor 7.4.4 The Suppliers 7.4.5 The Customers 7.5.6 The Project Company 7.5.7 The Governments Chapter 8: The Project Finance contractual arrangement 8.1 General 8.2 PPP Types 8.2.1 Build – Operate – Transfer (BOT) 8.2.2 Build – Own – Operate – Transfer (BOOT) 8.2.3 Buy-Build Operate (BBO) 8.2.4 Build – Own – Operate (BOO) 8.2.5 Build – Own – Operate – Transfer (BOOT) 8.2.6 Design – Build 8.2.7 Design – Build – Finance 8.2.8 Design – Construct – Maintain – Finance (DCMF) 8.2.9 O & M (Operation & Maintenance) 8.2.10 Lease-Purchase 8.2.11 Turnkey contract 8.3 Bidding and Award Procedure Purposes Procedures Evaluation 8.4 PPP Contract clauses 8.4.1 PPP Contracts under various Legal Systems Common Law System Civil Law System Islamic law 8.4.2 PPP Key Contractual terms 8.4.2.1 Force Majeure The Concept of Force majeure Force Majeure and hardship clause Consequences of Force Majeure 8.4.2.2 Material Adverse Government Action 8.4.2.3 Change of Law Concept of Change in Law Relief and Compensation 8.4.2.4 Termination of Contract The concept of contractual termination Early Termination by the Public Authority 8.4.2.5 Governing Law and Dispute Resolution The PPP Governing Law The PPP Dispute Resolution Chapter 9: Alternative Dispute Resolution 9.1 General 9.2 Advantages and disadvantages of ADR 9.2.1 Benefits of ADR 9.2.2 Disadvantages of ADR 9.3 Forms and Types of ADR 9.3.1 Adjudicative ADR Arbitration Neutral Fact-Finding 9.3.2 Evaluative ADR Peer Evaluation Specialist or Expert Evaluation 9.3.3 Facilitative ADR Mediation Conciliation Consensus Building 9.4 International Platforms 9.4.1 The ICSID 9.4.2 The International Chamber of Commerce 9.4.3 The Arbitration Institute of the Stockholm Chamber of Commerce (SCC) 9.4.4 The Hong Kong International Arbitration Centre (HKIAC) 9.4.5 The Singapore International Arbitration Centre 9.4.6 The Cairo Regional Centre for International Commercial Arbitration Chapter 10: Project Finance Governance 10.1 General 10.2 OECD Principles for public governance of PPP 10.3 Quality Infrastructure investment principles 10.4 PPP Governance Paradigm 10.4.1 Traditional Public Administration 10.4.2 New Public Management 10.4.3 Collaborative Governance 10.4.4 Private Governance Approach Chapter11: International Project Finance and Corruption 11.1 General 11.2 Forms of Corruption Bribery Lubrication Subornation Lobbying Extortion Cronyism Patronage Influence peddling Graft 11.3 Fighting corruption within World Bank Group-financed projects 11.3.1 Effects of Corruption on Projects Finance 11.3.2 Corruption in the extractive industries 11.3.3 Example: Extractive Industries Transparency Initiative Chapter 12: Infrastructure Projects Finance 12.1 General 12.2 Substantial Project Financing 12.2.1 Water and Sanitation Project 12.2.1.1 Human Right to Water and Sanitation 12.2.1.2 Water and Sanitation PPP Concessions BOT Project DBO Project 12.2.2 Transportation and Telecommunications Projects 12.2.2.1 Transportation Airports Ports Roads Railways Urban Passenger Transport 12.2.2.2 Telecommunications 12.2.3 Climate and Energy 12.2.3.1 Climate Change 12.2.3.2 Energy Power Chapter 13: Public Fiscal Risk Assessment Model 13.1 General 13.2Understanding the Fiscal Metrics 13.3 PPP Accounting and Reporting 13.3.1 Budgeting 13.3.2 Accounting 13.3.3 Reporting PPPs in Public Deficit and Debt 13.4 Assessment of Fiscal Risk (i) Identification and Assessment of Risks (ii) Mitigating factors 13.5. Performing the Sensitivity analysis GDP shock. Exchange rate shock Inflation shock. Chapter 14: Cases study 14.1 General 14.2 Successful stories 14.2.1 Breaking New Ground: Lesotho Hospital Public-Private Partnership-A Model for Integrated Health Services Delivery 14.2.2 Ukraine: Providing Safe Harbors for Ukraine’s Economic Growth 14.2.3 Senegal- A Road leads to Economic Opportunities 14.2.4 China (1997): The Greenfield project to install modern medium-density fiberboard plants 14.3 Unsuccessful PPP 14.3.1 Liberia Education Advancement Programme (LEAP) 14.3.2 The New Paris Courthouse 14.3.3 International Airport of Chinchero – Cuzco
