Most people are no strangers to "financing", such as house leasing and car leasing, but these usually do not have the problem of ownership transfer and can be classified as traditional leasing. Financial leasing is the representative of modern leasing industry, which is essentially a financial means alongside bank credit and insurance. The following is a detailed description of the financing channels of PPP projects that I have compiled. Welcome to share.
Detailed explanation of financing mode of PPP project
According to the introduction of social capital to invest in infrastructure and public utilities this year, Hebei Province has launched 32 projects with an investment of 654.38+03.3 billion yuan. Fujian Province has launched 28 projects with an investment of 654.38+047.8 billion yuan; Sichuan launched 264 projects with an investment of 253.4 billion yuan; Jiangxi Province launched 156 projects with an investment of 318.5 billion yuan; Hubei Province has started 235 projects with an investment of 370 billion yuan. According to the latest data of Hunan Province, 82 projects have been started this year, with a cumulative investment of 1, 356,5438+0 billion yuan. Previously, the National Development and Reform Commission announced the first batch of 1043 PPP projects with a total investment of 1.97 trillion yuan. Faced with such a large demand for funds, how will these funds be raised? The following is a detailed interpretation:
First, the connotation of PPP project
Generally speaking, PPP model is a general term for various public-private cooperation models, which are mainly used in public projects such as infrastructure. First of all, the government chartered new project companies for specific projects and provided them with support measures. Then the project company is responsible for project financing and construction, and the financing sources include project capital and loans. After the project is completed, the enterprise chartered by the government will develop and operate the project, and the lender can not only get direct benefits from the project operation, but also get transformed benefits through government support.
After 1990s, PPP (Public-Private-Partnership, namely "public-private sector-private enterprise-cooperation" model) first became popular in the west, especially in Europe, and played an important role in the field of public infrastructure, especially in the construction of large-scale and one-off projects, such as roads, railways and subways.
PPP mode is an optimized project financing and implementation mode, which takes "win-win" or "win-win" of all participants as the basic concept of cooperation. Its typical structure is that government departments or local governments sign franchise contracts with special companies established by the winning bidders through government procurement, and the special companies are responsible for financing, construction and operation. Governments usually reach direct agreements with financial institutions that provide loans. This agreement is not an agreement to guarantee the project, but an agreement to promise the lending institution to pay the relevant fees according to the contract signed with the special purpose company. The agreement enables special purpose companies to obtain loans from financial institutions more smoothly. The essence of adopting this financing form is that the government accelerates the construction and effective operation of infrastructure by giving private companies long-term franchise rights and income rights. The connotation of PPP mode mainly includes the following three aspects:
First of all, PPP is a new project financing model. PPP financing is a project-oriented financing activity and a form of project financing. Financing is mainly arranged according to the expected income, assets and government support of the project, not according to the credit of the project investors or sponsors. The direct income from project operation and the benefits transformed through government support are the sources of funds to repay the loan, and the assets of the project company and the limited commitment given by the government are the security guarantee of the loan.
Second, PPP financing mode can allow more private capital to participate in the project, improve efficiency and reduce risks. The government, public departments and private enterprises cooperate in the whole process on the basis of franchise agreement, and both parties are responsible for the whole cycle of project operation. The operation rules of PPP financing mode enable private enterprises to participate in the preliminary work such as confirmation, design and feasibility study of urban rail transit projects, which not only reduces the investment risk of private enterprises, but also introduces the management methods and technologies of private enterprises into the project, which can effectively control the construction and operation of the project, thus helping to reduce the investment risk of project construction and better protect the interests of the state and private enterprises. This is of practical significance for shortening the project construction period, reducing the project operating cost and even the asset-liability ratio.
Third, the PPP model can guarantee the profits of private capital to a certain extent. The investment goal of the private sector is to seek projects that can repay loans and return on investment, and unprofitable infrastructure projects cannot attract private capital investment. Using PPP model, the government can give private investors corresponding policy support as compensation, such as tax incentives, loan guarantees, and giving private enterprises priority in developing land along the route. By implementing these policies, the enthusiasm of private capital to invest in infrastructure construction can be improved.
PPP mode is a complete concept of project financing, but it is not a complete change of project financing, but a new organizational setting mode in the process of project life cycle. It is a form of cooperation among the government, for-profit enterprises and non-profit enterprises based on a project and with the concept of "win-win" or "win-win". All parties involved can achieve more favorable results than expected by individual actions, and their operational ideas are shown in the figure. Although none of the participants achieved their ideal maximum benefits, the total benefits, that is, social benefits, were the biggest, which was obviously more in line with the purpose of public infrastructure construction.
Second, the PPP model case
The construction of urban complex in No.3 area of Shuangpai County is a key project determined by the county party committee and the county government, and it is also a PPP project that Shuangpai County cooperates with our company, and our company has obtained the right to sell, operate and develop the residential area of this project. The project is located in the main urban area of the county, with an overall area of 4,470 square meters and a height of 27 floors. The podium building on the ground has 5 floors, and the floors 6 to 27 are boutique houses with a total construction area of more than 40,000 square meters and an investment of about/kloc-0.47 billion yuan. It is a livelihood construction project approved by the National Development and Reform Commission, and the employment and social security service platform of Shuangpai County is also among them. It will become a mass service center integrating government service, talent exchange, employment service, vocational training, job recruitment, social security payment and labor rights protection, which will play an extremely important role in promoting government-oriented and effective government construction and better serving the county's economic development. Surrounded by a circular fire road, the traffic is convenient. In the residential part, two high-rise residential buildings are arranged in the north and south of the plot to improve the living quality and become the first benchmark for urban living in Shuangpai County.
According to the agreement signed between our company and Shuangpai county government, our company established a project company in Shuangpai county to invest in the construction of urban complex in No.3 area of Shuangpai county by BOT. Our company has the right to operate residential buildings and infrastructure projects in this area. During the whole construction and operation period, the project company is absolutely controlled by our company, operating independently and taking responsibility for its own profits and losses.
Third, the complete solution of PPP project financing mode.
(1) Equity contribution
Equity contribution means that the shareholders of PPP project company contribute to complete the operating turnover of PPP project. Generally speaking, as a shareholder of a PPP project company, its special advantage lies in its ability to obtain the operating income of the project, and to control the income by participating in or mastering the overall operation of the company, so as to get more for more work. In addition, if shareholders are also service providers or goods suppliers of the project company, they can also obtain more favorable business opportunities. However, compared with other creditors, the disadvantage is that shareholders have the weakest priority in the distribution of company property income, and only when creditors' claims are satisfied can they obtain the income from their equity investment. Generally speaking, the use of equity investment is the most risky and profitable. Common shareholders are project participants, local investors, governments, concessionaires, institutional investors, bilateral or multilateral organizations, etc.
For creditors, there are generally three ways to reduce their investment risk: one is to obtain the guarantee from the bank or the third party; Second, try to choose a certain proportion in advance or pay the investment in installments according to the proportion, so as to leave a capital buffer for yourself; Third, choose to break through the limitation of liability of limited liability companies and recover corporate debts from shareholders. Generally, this goal can be achieved only by special commitment of shareholders, and its essence is nothing more than third-party guarantee. This situation mainly occurs in a certain link of the project where the risk is too high to obtain investment, and the shareholders, as the owners of the project company, are more willing to bear additional guarantee responsibilities for this link.
(2) Creditor's rights contribution
Compared with equity investment, the borrower's advantage is that the priority distribution of benefits is earlier than that of shareholders, and the disadvantage is limited income. Generally speaking, debt repayment is usually based on fixed or floating interest rates and is paid by the debtor on a regular basis. In addition, when selecting borrowers, special attention should be paid to the following issues:
Multilateral organizations and export credit agencies: The package of loans obtained through this channel can avoid certain political risks and obtain preferential policies from the host government in loan repayment, but it is often difficult to obtain such loans due to strict restrictions and requirements.
Commercial banks: For long-term loans, commercial banks are a common choice. Compared with issuing bonds, the advantages of commercial bank loans are: in the case of long project cycle and unpredictable future risks, it gives borrowers a certain negotiation space and gives debtors more adjustment space;
Equipment providers, financial lessors, etc. In order to obtain business opportunities and be more conducive to selling their own products, equipment or service providers of certain projects will also agree to provide loans; Financial lessors are similar to equipment providers in this respect, that is, they are willing to provide more competitive financing conditions in order to lease their products more favorably.
Syndicated loan: The loan provided by each bank in a syndicate is independent, with independent rights and obligations, and basically will not endorse other banks. As an intermediary, the agent bank puts forward conditions to the borrower on behalf of the syndicate, verifies whether the borrower finally meets the requirements, receives the syndicated loan and calculates the interest rate. Because of its complicated structure, this method is often suitable for projects with large amount.
(3) Bank Letter of Credit and Letter of Guarantee
These methods are essentially to reduce the capital share of the project company and improve the liquidity of funds. Most of the documents are consistent and payable at sight. In some cases, it may be necessary to take court judgment or arbitration award to prove the relevant breach of contract before payment can be obtained. When issuing these bills or providing guarantees, banks will basically require the entrusting party to provide counter-guarantees with the same amount as their guarantees, mostly with higher amounts. When the conditions are met, the bank has the right to convert the price payable by the project company under the counter-guarantee into its loan, and requires to sign a creditor agreement to ensure its property rights to the project company.
(4) Bond/capital market financing
This method enables borrowers to obtain loans directly from individuals and institutions without the intermediary of banks. Generally speaking, the advantages of this method are low interest rate, long repayment period and strong liquidity. The disadvantages are that it involves endorsement, underwriting, trust, bond rating and other links and qualification requirements, resulting in many approvals, long time-consuming, complicated procedures, poor flexibility and high risks. Generally speaking, this financing method will not be used in the initial stage of the project, but it can still be used for project refinancing after the project has gone through the construction period and the project risk has been greatly reduced.
mezzanine finance
Mezzanine financing is also called reserve fund, because it is between equity investment and creditor's right investment, and its compensation priority is also between them, that is, it is later than creditors and earlier than shareholders to obtain compensation or income distribution. The typical ways of mezzanine financing include providing subprime loans and issuing preferred shares. The former is reflected in the repayment later than the ordinary borrower, and the latter is reflected in the fact that the project income distribution can be obtained but the company cannot participate in the operation. Generally speaking, the project company's motivation for adopting this method is to control its asset-liability ratio, especially when the project has over-budget expenses (within 10%). In order to obtain funds as soon as possible, they adopt this method for financing.
But this financing method is characterized by higher cost than ordinary loans. Because investors under mezzanine financing receive income distribution later than ordinary creditors, in order to make up for the risks they bear, the project company will generally choose to provide them with higher interest than ordinary loans, or distribute the income of the project company to them (such as options and convertible bonds), which will generally be arranged by trust.
(6) Creditor's agreement
Creditor's agreement means that in order to determine the distribution of interests among different creditors, creditors can reach some agreements on issues related to compensation, including establishing the order of fund withdrawal, arrangement of due debts, distribution of creditor's rights, arrangement of security rights, payment management, resolution, insurance fund management, technical consultant management, etc. , play a central role in coordinating the financing management of PPP projects.
Hunan You Na Investment Management Co., Ltd. specializes in PPP project investment and financing consulting and operation management, PPP management consulting. At present, our company has participated in the preliminary investigation of five bidding projects and 1 landing entity projects, and has professional engineering experts, financial experts and investment and financing experts. The company's business scope includes infrastructure investment and financing consulting, infrastructure enterprise restructuring and management consulting, new city and development zone construction investment and financing and management consulting, policy research consulting, dealer debt restructuring plan research consulting. Services include water supply and drainage, garbage disposal, gas heating, power generation, rail transit, primary land development, new towns, development zones and large-scale comprehensive development projects.
Main functions of ppp method
PPP can be divided into financing and non-financing. PPP project contract is a contract concluded by the government and social capital on PPP project cooperation according to law.
Its purpose is to allocate the project risk reasonably between the government and social capital, clarify the relationship between the rights and obligations of both parties, ensure that both parties can claim their rights reasonably according to the contract, correctly perform their obligations, and ensure the smooth implementation of the project in the whole life cycle.
Non-financing PPP method:
(1) handover, operation and handover (TOT)
Government departments hand over the facilities they own to private organizations for operation. Usually, private institutions need to pay a transfer fee and hand over the facilities to the government free of charge after the expiration.
(2) Activity outsourcing
By signing outsourcing contracts, the government or government companies entrust some operational and auxiliary work to external enterprises/individuals to undertake and complete, so as to concentrate resources and attention on their core affairs. Generally, the government pays the operators.
(3) Operation and Maintenance Contract (O&; m)
According to the contract, private sector partners operate public assets for a specific period of time. The public partner retains ownership of the assets.
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