Chapter 10

Financial Structuring

§10.1 Introduction

This chapter deals with the process by which bidders and their lenders structure the financing for a PPP project. The Service Fees (cf. Chapter 13) are the final output of this process, since these have to cover the Project Company’s financing and operating costs and provide a return on the bidders’ equity investment.

A financial model is used to make the required calculations for the bid, and at various other phases of the project (§10.2); although this book is not intended to cover financial modelling in depth, the key inputs and outputs for the financial model are reviewed (§10.3), including the financing costs (§10.4). The model has to work within the constraints of:

• the Public Authority’s ...

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