Principles of Project Finance

company—for example, a road, bridge, or tunnel—and therefore ownership

remains with the public sector.

Build-transfer-operate (“BTO”) projects. These are similar to a BOT proj-

ect, except that the public sector does not take over the ownership of the proj-

ect until construction is completed.

Build-own-operate (“BOO”) projects. These are projects whose owner-

ship remains with the Project Company throughout its life—for example,

a power station in a privatized electricity industry or a mobile phone net-

work. The Project Company therefore gets the benefit of any residual value

in the project. (Project agreements with the private sector also normally fall

into this category.)

There are other variations on these acronyms for different project structures, ...