Financing Water and Sanitation Projects : The Unique Risks

Haarmeyer, David ; Mody, Ashoka

World Bank, Washington, DC

关键词: PROJECT FINANCE;    PRIVATE INVESTMENTS;    LONG-TERM DEBT;    CASH FLOW;    MONOPOLIES;   

RP-ID  :  18442

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

A project finance structure allows waterprojects with attractive cash flows and risk profiles tosecure long-term private capital. But even in industrialcountries the credit strength of off-taking municipalgovernments and the sector's traditional monopolystructure expose lenders to potentially significant credit,regulatory, and political risks. These risks, combined withthe sunk, highly specific, and non-redeployable nature ofwater infrastructure investments, mean that lenders andinvestors are vulnerable to opportunistic contractingproblems and expropriation. Reviewing some recent innovativewater and sanitation projects, the authors show that privatecapital participation on a limited recourse or nonrecoursebasis has required support by third parties such asmultilaterals and federal government agencies to absorbnoncommercial risks.