Chapter 9

Private-Sector Financing— Sources and Procedures

§9.1 Introduction

This chapter reviews the main private-sector financing sources for PPP projects (assuming finance on a project-finance basis). The use of public-sector funding for PPPs is discussed in Chapter 17.

One of the first steps a bidder for a PPP Contract normally takes to secure financing is to engage a financial adviser, with experience in project finance and PPPs (§9.2). Private-sector projectfinance debt is provided from two main sources—commercial banks (§9.3) and bond investors (§9.4). Commercial banks provide long-term loans to project companies; bond holders—typically long-term investors such as insurance companies and pension funds—purchase long-term bonds (tradable debt ...

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