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ENABLING FACTORS FOR PRIVATE SECTOR INVOLVEMENT
Structural Technical
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OUTLINE OF PPP SCHEME AND ITS STAKEHOLDERS
Typical Structure of a WTE Project with PPP Scheme
MoF Support
- PPP / Waste Supply Agreement (if needed)
Waste Collection & Transport
- Provision of land for the project
- Permits/ Licenses Viability Gap Fund (VGF)
(only for PPP Project)
Sponsors
Equity / Subdebt
IIGF Guarantee
Project
EPC O&M
Management
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PROJECT FINANCING STRUCTURE
IIGF Guarantee
• Termination IIGF Guarantee
• Tipping fee payments
The Sponsors will provide equity financing to the SPV [25-30%] of total project costs to allow the SPV to
raise senior (non-recourse) debt for the remaining part [70-75%].
The sponsors can expect to partner with IFIs who have strong interest in providing and leading the senior
debt financing package.
The IFIs can work/engage commercial banks, insurance companies and concessional funding (for the first
few projects).
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KEY RISK ALLOCATIONS
Private Public
Risk Shared Comments
Partner Partner
Delay in land acquisition X
Planning Risk X
Permitting Risk X The City will use best efforts to facilitate the receipt of permits
Ground conditions Risk X Risk is passed on the Private Partner, on the basis of detailed site surveys that
were prepared during project preparation
Historic contamination X
Credit Risk X The Private Partner will bear the credit risk of the City.
Financing Risk X Adjustment mechanism is used at financial close to reflect the final financing
construction
Delivery of Waste Risk X The City guarantees the delivery of waste to the plant (exclusivity).
Plant availability Risk X In case of unscheduled unavailability of the plant to accept the waste, the Public
Partner deducts penalties from the availability payment
Plant Performance Risk X In case of poor performance (such as plant inefficiency, breach of diversion
targets, non-compliance with emission standards), the Public Partner deducts
financial penalties from the availability payment
Early Termination Risk X City default: Debt and Equity (incl. ROE) fully compensated by the City, net of
insurance proceeds
Private Partner Default: Debt fully compensated by the City, net of insurance
proceeds
Force Majeure: Debt and disbursed equity (excl. ROE) fully compensated by the
City, net of insurance proceeds
City PLN
Segregated Project Account
PUBLIC
PRIVATE
Monthly Project Payment Electricity off-take
as per PPP contract payment as per PPA
contract
SPV
Project Account
Shareholders Lenders
THANK YOU