Guidelines for Implementing Asset Recycling
Concession and Lease Models
Infrastructure is pivotal to sustainable development with positive impacts on the economy, environment and society if implemented correctly. Each piece of infrastructure asset should not be viewed on a standalone basis (such as a power plant, an airport, a road, or a water facility), but as part of an ecosystem comprising of a portfolio of assets that collectively support the SDGs.
Given the fiscal constraints and higher upfront costs associated for developing low-carbon infrastructure and transitioning away from carbon-intensive infrastructure, public budget alone will be insufficient to fully fund the infrastructure needs. The COVID-19 pandemic has seen severe pressure on public budgets as governments have re-directed the resources to address the fall out of the pandemic.
Given so, governments must find alternative sources of funding for infrastructure investments; a well-implemented asset recycling program presents as an option to monetize invested capital to meet the infrastructure development needs.
This set of Asset Recycling Guidelines have been developed to support governments in selecting, preparing, and delivering asset recycling transactions, with a focus on long-term concession and lease models only. The Guidelines have been drafted to provide a systematic and consistent approach to facilitate asset recycling transactions under these models.
The Guidelines have been prepared with the assistance of KPMG. They were not prepared with any specific transaction in mind and were meant to serve only as general guidance. It is therefore critical that the Guidelines be reviewed and adapted for specific transactions.
Find the sections below or check the Guidelines for Implementing Asset Recycling Transactions Content Outline, or Download Full Report for more.