Article by Ron Vered and BrigittaZibenberg For many years, project finance has been, and remains, thepreferred form of financing for large-scale industrial andinfrastructure projects worldwide. The availability ofinfrastructure facilities is imperative for the overall developmentand economic growth of any country, especially of emergingeconomies. Therefore, the long-term need for infrastructurefinancing in both developing and industrialised countries is veryhigh and of pivotal importance. However, almost every country facesthe problem that its actual infrastructure requirements are far inexcess of the funding allocated for this purpose. The recognitionof this financial deficit has led to a nearly universalacknowledgment that the private sector should play a greater rolein the financing of infrastructure in partnership with the publicsector. PPP In Israel Public-private partnership (PPP) represents a successful policyoption available to a government for the provision of basicservices (for instance, health, transportation, energy, waterdesalination, education facilities), which seeks to involve theprivate sector. As such, PPP is an alternative to traditional fullpublic provision of such services, particularly where the servicesare private in nature and the government's resources arelimited. Thus, for the public sector, PPP provides a level ofcertainty for schedule and cost. For the private sector it offers aunique business opportunity, allowing private companies to delivera wide range of services over a long contract period (usually 20 to30 years). In recent years, there have been a number of very large projectsin Israel in which the private sector has been substantiallyinvolved in the construction and funding of public infrastructure.These are long-term and large-scale contractual partnershipsbetween public- and private-sector agencies, targeted towardsfinancing, designing, implementing and operating infrastructurefacilities services. The surge of such project finance transactions in Israel, basedon PPP models, coincides with the creation of extensive andlong-term government programmes focused on fostering thedevelopment of infrastructure in the country. The involvement ofprivate-equity funds in projects such as the construction of tollroads, desalination facilities and other infrastructure facilitiesis evidence of the maturing PPP market in Israel. Moreover, witnessing the success of the strategy, the IsraeliPPP market is expanding the scope of projects to areas...
Public-Private Partnerships: An Effective Model For Project Financing
|Profession:||Yehuda Raveh & Co.|
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