A key motivation for governments considering public private partnerships is the possibility of bringing in new sources of financing for funding public infrastructure and service needs.
This section provides an introduction to the main mechanisms for infrastructure projects, the principal investors in developing countries, sources of finance (limited recourse, debt, equity, etc), the typical project finance structure, and key issues arising from developing project financed transactions, risks and risk allocation in project financed transactions, risk mitigation mechanisms, government support in financing PPPs and how governments can categories of borrowers and lenders and supporting instruments such as guarantees, insurance etc, including those that are available to developing countries from international financing institutions and export credit agencies.
This serves as an introduction to financing of these projects, to explain some of the key terms and concepts. It is not intended to be an exhaustive guide on the topic and it is recommended that you look at the Further Reading section and click on some of the links provided to give further details. Financing of projects follows market trends and volatility and some of these trends may not be reflected in this section.
If you have any particular suggestions for materials to be included, please contact us at firstname.lastname@example.org.
- J Delmon, Private Sector Investment in Infrastructure, 2nd Ed, Kluwer.
- Vinter and Price, Project Finance: A Legal Guide (3rd edition 2006).
- Project Finance International: Thomson Reuters Project Finance International (PFI) is the leading source of global project finance intelligence, and has been for over 17 years. Reporting on the entire lifecycles of deals – from the initial rumours through to post-completion analysis – PFI provides the essential pipeline information, sector news, historical data and deal analysis for you and your organization.
Denton Wilde Sapte, Public Private Partnerships: BOT techniques and project finance, (2nd Edition, 2006).
Global Partnership on Output Based Aid is a facility that supports output based solutions.
Krishnan, “Tamil Nadu Urban Development Fund: Public-Private partnership in an infrastructure finance intermediary” (World Bank, 2007).
Irwin, Government Guarantees: Allocating and Valuing Risk in Privately Financed Infrastructure Projects (PDF) (World Bank, 2007).
Project Finance Primer 2010 (FHWA US 2010): This is an update to the Innovative Finance Brochure, published in 2002 (Publication No. FHWA-AD-02-006). It focuses on bonds and credit assistance and incorporates new project finance techniques that have become available for transportation projects since the brochure's publication in 2002, including changes and new programs adopted under SAFETEA-LU.
Brixi, Budina and Irwin, “Managing Fiscal Risk in Public Private Partnerships” (PDF) (World Bank, 2006).
“Government Guarantees and Fiscal Risk” (PDF) (International Monetary Fund, 2005).
Delmon, “Implementing Social Policy into Contracts for the Provision of Utility Services”.
Dani, Kessler and Sclar eds., Making Connections: Putting Social Policy at the Heart of Infrastructure Development (2007).
Hassan, M. Kabir and Mervyn K. Lewis (eds.), The Handbook of Islamic Banking, Edward Elgar, Cheltenham, UK and Northampton, Mass. 2007, ISBN 1 84542 0837. Paperback edition, 2009, ISBN 978 1 84844 4737 (e) 978 1 8572 5414.
Scriven, Pritchard and Delmon (eds), A Contractual Guide to Major Construction Projects (1999).