Day 1
Overview of Public Private Partnerships (PPP)
• Public Private Partnerships (PPP) Principles
• Roles for the Public and Private Sector
• Different Structures and Degrees of Private Participation
– Contract Services: Operations and Maintenance
(O&M), O&M and Management
– Leasing, Lease Develop Operate (LDO), Lease Purchase,
– Sale Leaseback
– Design Build: DB, DBM, DBO,DBFO
– BOT, BOO Concessions
– Privatization
The PPP Tender Process
• Specifying User Needs in Output Terms
• Private Sector Informational Requirements
• Identifying Bidders and Assessing Risks
• Negotiating Strategies and Closing
Sources of Finance: Managing and Allocating Risks in PPP; Making a Deal Bankable
• Collecting Information/ Macro and Micro
• Concerns of Banks
• Risk Allocation in PPP/ Developing a Specialized Matrix
• Risk Mitigation Techniques
• Analyzing Risk Assumptions (Operating and Maintenance, Construction, Financial, Revenues)
• Environmental Considerations
• Consultants in the PPP Process
Quantitative Risk Analysis and Cash-flow Forecasts
• Debt vs Equity and Key Measurements
• Probabilistic Modeling
• Testing Sensitivities
• Requirements of Creditors vs Investors
• Other Stakeholder Considerations
• “Value for Money” and the Public Sector Comparator (PSC); Unitary Payments (UPs)
CASE STUDY: Financing a Tollroad
Participants will break into groups to evaluate the financing scheme for a toll road. They will assess the allocation of risks, and concession terms, and other contractual agreements. A cash flow model will be used to test qualitative assumptions.
Day 2
TOLLROAD CASE DISCUSSION
Legal and Contractual Issues in PPP Projects
• Regulatory Framework and Enforceability
• Policy Objectives of the Government Concessions and Licensing, Process and Oversight
CASE-STUDY: Reviewing a DBFO Term Sheet Financing Issues: Sources of Funds and Credit Enhancement for PPP Using Bank Debt Club Deals, Syndications and Secondary Market Resale Term Sheets, Information Memoranda and Credit Agreements Conflict Resolution
CASE-EXAMPLE: Canada Line Rapid Transit
• PPP and Rapid Transit Projects
• Phases of the Canadian Selection Process
• Public Sector Comparator and Risk Assessment
• Sensitivity to the Discount Rate
Capital Markets and PPP
• Special Consideration in Bond Issuance
• Sales Process, Covenants, Work out Considerations
• Role of the Rating Agencies
• Mono-line Insurers and Wraps
• Tapping Local Markets
• Derivative Products for PPP
CASE: Financing an Airport
Case focuses on conflicting goals of government and other stakeholders from the concessionaire to the contractor, operator and other stakeholders. Review of cash flow projections, project risks and their allocation through contracts in an airport transaction. The proposed financing mix, and rating agency considerations in evaluating financing structure are considered.
Day 3
CASE DISCUSSION
Sources of Credit Support and Risk Support in International PPP Projects
• Official Risk Enhancers and PPP (ECAs, Development Banks)
• Rating Agencies and Pension Fund Sales for Chilean and Mexican PPP Tollroads
• Accessing Local Capital Markets in Developing Countries
Further Sector Considerations:
Special Features of Water Infrastructure
• PPP in Water and Sanitation Projects
• An Array of Structures
• Who are the Players? Investors and Lenders?
CASE EXAMPLES: Wastewater Treatment in
Mexico with a peso-denominated private placement. Leasing in West Africa.”
CASE STUDY: Financing a Water Treatment Plant Participants will break into groups to prepare a case study concerned with the terms of a concession and financing a municipal wastewater treatment plant.
PPP and Social Infrastructure
• Financing Hospitals, Schools, Prisons, Others
• Sample Concessions and Contract Terms
• Risk Evaluation and Allocation
• Monitoring Requirements
CASE STUDY: Financing a School
Self-test and Wrap-up