This is the second edition of a guide that identifies and discusses the key features of project financing in transport. The report details the role of the financial markets, regulators, the government, underwriters and multi-lateral agencies.
Extract from theIntroduction:
'This report seeks to provide a practical guide to project financing in the transport sector. Relatively few project finance deals have been done in the transport sector, compared, say, to the power or mining sectors. The sector is still developing and the project finance community is discovering new and innovative approaches to funding.
The transport sector is unique in that it usually involves closer, and more politically sensitive, contact with the consumers of the project's services than would be the case for most other infrastructure sectors.The success of a transport project can be largely dependent upon the accuracy of traffic flow forecasts and the competitiveness of the project's pricing regime (ie, tolls, fares, etc). Project financing in transport poses unique challenges due to the effect on traffic and patronage flows of factors such as land use, regional development and regional planning, that are usually outside the project sponsor's control.
We have only considered the general features of project financing and have aimed to develop concepts not generally covered elsewhere. While the report primarily draws on Macquarie's experience of being the financial adviser to several major transport infrastructure projects, we have also analysed the publicly available information detailing the experiences of other transport projects.
The report's main focus is on tollroads as these projects have the most successful track record compared to other transport modes. Procedures and government regulations are becoming better defined and in many cases, the private sector is willing to accept most of the project risks.
Other transport modes like airports, ports, rail (passenger and freight) and urban transit are also discussed, as are the common financing issues for these types of transport projects.
Since the transport sector is so large and the operating, financial, legal and taxation issues so diverse, we have chosen to highlight the key issues that are common to a large number of projects. Naturally, the issues involved in each infrastructure project are unique and some of the project or country specific issues will undoubtedly vary between projects. Thus, the information in this report should be treated as a guide only and is not a substitute for specialist financing and other advice at all stages of developing a project.
Contents:
1. Terminology
2. Introduction
3. Project financing-an overview
4. Characteristics of different transport systems
5. Features of project financing in transport
6. Importance of traffic and patronage forecasting in the process
7. Role of the capital markets
8. Sources of funding-debt
9. Sources of funding-equity
10. Finance plans
11. Optimising the funding structure and structuring the financial package
12. Role of government and specialist agencies
13. Illustrative case studies
References
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