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The Guidelines have not been prepared with any specific transaction in mind and are meant to serve only as general guidance. It is therefore critical that the Guidelines be reviewed and adapted for specific transactions To find more, visit the Guidelines to Implementing Asset Recycling Transactions Section Overview and Content Outline, or Download the Full Report.

This is a new section of the website and is currently in draft form.  For feedback on the content of this section of the website or suggestions for links or materials that could be included, please contact the PPPLRC at ppp@worldbank.org.

 

 

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Asset Identification/Selection ***
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The Guidelines to Implementing Asset Recycling Transactions is intended to be a living document and will be reviewed at regular intervals. Visit the Asset Recycling: Decision maker’s notes for a practitioner's overview of Asset Recycling programs. To find more, check out the Section Overview and Content Outline, or Download the Full Report.

 

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Guidelines for Asset Identification

Asset Selection Process

Guidelines for the Selection of Assets - In selecting an appropriate asset as the subject of an asset recycling transaction, the Relevant Authority should consider five (5) key parameters; being (i) operational, (ii) financial / commercial checks, (iii) legal and regulatory, (iv) early-stage market testing, and (v) and social and environmental.

See case studies on selection of assets below:

Box 2: Case Studies from India and Indonesia

Asset selection for toll-operate-transfer (TOT) model of road asset monetization, India

The selection of assets is based on asset’s track record of exhibiting certainty in toll generation. As the assets are operating, concessionaires do not bear any developmental and construction risks.

Accordingly, the assets should (i) be operational with observable traffic demand and be supported by (ii) reliable traffic forecast with (iii) substantial capital expenditure already incurred thereby de-risking the concession from development and construction risks.

As per the latest guidelines, the public funded highway projects which are operational and have toll revenue generation history of one (1) year after the commercial operations date shall be monetized through TOT model.

Asset selection for Limited Concession Scheme (LCS), Indonesia

As per the regulation on LCS, assets belonging to the State, and assets belonging to State-owned enterprises (SOEs) are eligible for monetization. These include infrastructure assets such as transportation assets (seaports, airports, railways and bus terminals), toll roads, water/drinking water, sewerage and waste management systems, telecommunications assets and energy (power/renewables, oil and gas).

The LCS Assets must satisfy criteria set out in the regulation:

  • The assets have operated for at least two years

  • The assets require operational efficiency.

  • The life of the assets is at least ten years.

  • The assets have a track record of positive cash flow for at least two (2) consecutive years.

Key Parameters 

The Relevant Authority should review each parameter as set out below: 

Operational Checks in Asset Selection Find operational criteria in selecting an appropriate asset as the subject of an asset recycling transaction.
Financial/Commercial Checks in Asset Selection The following commercial and financial reviews should be considered to determine if an asset has the potential to be… more
Legal and Regulatory Checks in Asset Selection Check the following legal and regulatory parameters to consider in assessing the suitability of an asset for recycling.
Early-Stage Market Testing Early-stage market interest should also be conducted to shape the potential transaction and assess the level of market… more
Social and Environmental Checks in Asset Selection Social and Environmental Checks must likewise be considered in assessing potential asset recycling transactions.
Note/s:

The Guidelines have not been prepared with any specific transaction in mind and are meant to serve only as general guidance. It is therefore critical that the Guidelines be reviewed and adapted for specific transactions To find more, visit the Guidelines to Implementing Asset Recycling Transactions Section Overview and Content Outline, or Download the Full Report.

This is a new section of the website and is currently in draft form.  For feedback on the content of this section of the website or suggestions for links or materials that could be included, please contact the PPPLRC at ppp@worldbank.org.