Estimating the Cost of Capital for PPP Contracts in Emerging Markets
This report outlines and explains a method for estimating the rate of return that is required by equity investors in PPP contracts in emerging markets. It is designed for policymakers, practitioners, and others involved in quantitative financial analysis (including budget appraisals, value for money analyses, and the negotiation of contract prices) in these markets.
The report is structured as follows. In section 1, present the findings of our literature review and qualitative research, and explain how these have informed our theoretical framework. In Part 2, present the framework in more detail, and set out the proposed method, variable by variable, and finally as a step-by-step guide to estimation. it also illustrates the method via a series of case studies, estimating key variables in specific markets, and covering economic and social infrastructure.
