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    Public Private Partnerships

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    Charu Modi
    Public-private partnerships (PPPs) are an alternative model for financing infrastructure projects that can help address budget constraints facing governments. PPPs involve the government and private sector jointly financing, building, and operating infrastructure like roads, ports, and railways. They allow governments to take advantage of private sector efficiencies while meeting growing demand for infrastructure services. Sources of private financing for PPPs include equity offerings, debt offerings, bank guarantees, and bond market financing. The Indian government has embraced PPPs as a way to close its infrastructure funding gap.

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    Public Private Partnerships

    Uploaded by

    Charu Modi
    87 views14 pages
    Public-private partnerships (PPPs) are an alternative model for financing infrastructure projects that can help address budget constraints facing governments. PPPs involve the government and private sector jointly financing, building, and operating infrastructure like roads, ports, and railways. They allow governments to take advantage of private sector efficiencies while meeting growing demand for infrastructure services. Sources of private financing for PPPs include equity offerings, debt offerings, bank guarantees, and bond market financing. The Indian government has embraced PPPs as a way to close its infrastructure funding gap.

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    A ppt on PPP

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    Public-private partnerships (PPPs) are an alternative model for financing infrastructure projects that can help address budget constraints facing governments. PPPs involve the government and private sector jointly financing, building, and operating infrastructure like roads, ports, and railways. They allow governments to take advantage of private sector efficiencies while meeting growing demand for infrastructure services. Sources of private financing for PPPs include equity offerings, debt offerings, bank guarantees, and bond market financing. The Indian government has embraced PPPs as a way to close its infrastructure funding gap.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    87 views14 pages

    Public Private Partnerships

    Uploaded by

    Charu Modi
    Public-private partnerships (PPPs) are an alternative model for financing infrastructure projects that can help address budget constraints facing governments. PPPs involve the government and private sector jointly financing, building, and operating infrastructure like roads, ports, and railways. They allow governments to take advantage of private sector efficiencies while meeting growing demand for infrastructure services. Sources of private financing for PPPs include equity offerings, debt offerings, bank guarantees, and bond market financing. The Indian government has embraced PPPs as a way to close its infrastructure funding gap.

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    You are on page 1of 14

    Funding Infrastructure through

    Public Private Partnerships

    Presented by
    Ms. Charu Modi
    Infrastructure Financing
    Characteristics of Infrastructure
    Financing Projects
    • Longer maturity
     Financing for infrastructure needs to have enough maturities
    ranging from 5 to 40 years.
    • Larger amount
     Infrastructure finance is included with different set of
    initiatives which essentially measure the range of amount
    needed in order to complete the projects in the local
    rationalities.
    • Higher risk
     When large range of amounts are invested for long duration
    of time a risk may be elevated which can cause immense
    uncertainty in its course.
    Various Models of Financing

    • Wholly financed by Government


    and/or its agencies
    • Wholly financed by Private sector
    • Public – Private Partnership (PPP)
    Various Models of Financing

    Type Salient Features Examples


    • Ministry of
    Railways laying
    railway lines
    Directly through Cash
    • Ministry of Water
    Contracts
    Resources
    building dams
    Wholly financed by and canals
    Government • Nuclear Power
    and/or its agencies Corporation
    Through wholly owned setting up Nuclear
    agencies/corporations Power Plants
    Joint Venture between • Delhi Metro Rail
    the Central and the Corporation
    State governments (DMRC)
    • Bengaluru Metro
    5
    Various Models of Financing

    Type Salient Features Examples

    Private sector
    manages the
    entire project right
    Wholly financed from
    by Private -acquisition of land Healthcare and
    Companies/Agen -arranging Power Plants
    cies finances
    -constructing and
    operating the
    project

    6
    Public Private Partnership
    Government of India’s Definition

    A public-private partnership means a


    project based on a contract or
    concession agreement, between a
    Government or Statutory entity on the
    other side, for delivering an
    infrastructure service on payment of
    user charges.
    Another Definition

    A public-private partnership exists


    when public sector agencies (central,
    state, or local) join with private sector
    entities (companies, foundations,
    academic institutions or citizens) and
    enter into a business relationship to
    attain a commonly shared goal that
    also achieves objectives of the
    individual partners.
    Various Models of Financing

    Type Salient Features Examples

    Government provides land,


    facilitates in providing
    clearances through State
    Public Support Agreement (SSA) National
    Private Highways,
    Partners In certain cases, it also Metro
    hip provides Viability Gap Railway,Airport
    (PPP) Funding (VGF) s,Ports
    Private sector arranges the
    entire funding except the
    Viability Gap amount
    9
    Distinctive Uses

    Contracting with a private company to:


     Renovate
     Construct
     Operate
     Maintain
     And/or Manage
    A facility or system
    Why Funding Infrastructure through
    Public Private Partnerships ? ?
     Traditional funding sources are not
    keeping pace with infrastructure
    investment needs and the growing public
    demand for services.
     In short, P3 is a tool that can help
    government meet demands for the
    development of modern and efficient
    facilities, infrastructure and services.
    Means of Infrastructure Funding
    Sources of Funds for PPP:
    Sources of Funds for PPP:

     Equity offerings
     Debt offerings
     Bank guarantees/ letter of credit/
    performance guarantees
     Bond/ capital markets financing
     Mezzanine/ subordinated contributions
     Inter creditor agreement
    Conclusion
    PPP routes have been adopted by the
    government to meet the funding gap and use
    techno-managerial efficiencies of the private
    sector to obviate the inefficiencies in the
    traditional public procurement system. Various
    reforms have been introduced by the Union
    Government of India to create an enabling
    environment for participation of the private
    sector in the development of the infrastructure
    projects through the PPP route.

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