International Project Finance: The Public-Private Partnership

ISBN-13: 9783030963927 / Angielski

Felix I. Lessambo

Opis

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.

Spis treści

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

O autorze

Felix I. Lessambo is Adjunct Associate Professor at Fordham University, USA, where he teaches Corporate Tax and Audit & Assurance Services. He was an Associate Professor at Central Connecticut State University School of Business where he taught Financial Statements Analysis, Global Financial Reporting, and Law & Finance. He has practiced international tax, transfer pricing, and alternative investment management where he structured and advised on hedge funds and private equity cross-border transactions. He is the author of several books in finance including The International Banking System, The International Corporate Governance System, International Financial Institutions and Their Challenges, International Aspects of US Taxation System, Audit-Assurance Services & Forensics, Financial Statements: Analysis & Reporting, The US Banking System, Mergers in the Global Markets, International Finance, and The US Mergers & Acquisitions: Legal & Financial Aspects.

Blurb

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.

Felix I. Lessambo is Adjunct Associate Professor at Fordham University, USA, where he teaches Corporate Tax and Audit & Assurance Services. He was an Associate Professor at Central Connecticut State University School of Business where he taught Financial Statements Analysis, Global Financial Reporting, and Law & Finance. He has practiced international tax, transfer pricing, and alternative investment management where he structured and advised on hedge funds and private equity cross-border transactions. He is the author of several books in finance including The International Banking System, The International Corporate Governance System, International Financial Institutions and Their Challenges, International Aspects of US Taxation System, Audit-Assurance Services & Forensics, Financial Statements: Analysis & Reporting, The US Banking System, Mergers in the Global Markets, International Finance, and The US Mergers & Acquisitions: Legal & Financial Aspects.