Preserving the Integrity of the PPP Model in Victoria, Australia, during the Global Financial Crisis

The state of Victoria, Australia, under the Partnerships Victoria policy, uses public private partnerships (PPPs) as an important mechanism for meeting public service delivery needs in many social and economic infrastructure sectors. Since 2000, 21 PPPs have reached financial close, representing some $A10.5 billion of investment, about10 percent of Victoria’s total public investment program. Typically, the private sector designs, builds, finances, and maintains or operates the infrastructure and receives revenue consisting of service payments made by the government that are linked to the project company’s performance and the availability of the infrastructure. As in many markets, in Australia the global financial crisis substantially affected the cost and availability of financing for PPPs. Monoline guarantors, who had played a key role in many projects, were early casualties of the crisis, and their exit required new projects to raise debt from banks. Although the Australian banking sector was not affected by the crisis as substantially as in some countries, short-term funding costs and financing availability were significantly altered by a dramatic fall in liquidity. As the crisis unfolded, Victoria sought to maintain the integrity of its well-developed PPP model while meeting the changing situation in the financial markets. This approach required limited and carefully considered changes in the way a small number of finance-related risks were allocated and managed in PPP projects.

Bibliographic Details

Main Author:	Foster, Richard
Format:	Brief biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2010-07
Subjects:	NEW MARKET, EQUITY, INTEREST RATE SWAPS, CAPITAL, LONG-TERM INTEREST, LONG-TERM INTEREST RATE, FINANCING, LAST RESORT, FINANCIAL CRISIS, FUTURE, INTEREST, VALUE, FINANCIAL POSITION, GOVERNMENT GUARANTEE, BANK, COMMERCIAL TERMS, CREDIT, LENDER OF LAST RESORT, INTEREST RATE, LOAN COVENANTS, LIQUIDITY, WATER SUPPLY, CONTRACT, GUARANTORS, DEBT FINANCE, FOREIGN BANKS, REMAINING DEBT, LOAN, SHARES, PRICING, PROJECTS, MARKET, FACTORS, CREDIT RATING, PAYMENTS, TREASURY, LENDER, FUNDING SOURCES, STATE SUPPORT, FINANCIERS, LONG-TERM DEBT, LOAN AGREEMENTS, CAPITAL COST, LOAN DOCUMENTATION, FINANCIAL MARKET, INVESTMENT, RISK, SHARE, FINANCIAL MARKETS, BANKING, FINANCES, LIQUIDITY CONSTRAINTS, REVENUE, BANK DEBT, FUNDING, LENDING, PAYMENT, DOMESTIC BANKS, CRITERIA, MARKETS, DEBT, SWAPS, AMOUNT OF DEBT, LENDERS, LOANS, PRIVATE FINANCE, DEBT SERVICE, GUARANTEE, FINANCE, CASH FLOW, PUBLIC INVESTMENT, INFRASTRUCTURE, BANKS,
Online Access:	http://documents.worldbank.org/curated/en/2015/11/25236164/public-private-partnerships-solutions-preserving-integrity-ppp-model-victoria-australia-during-global-financial-crisis https://hdl.handle.net/10986/23036
Tags:	Add Tag No Tags, Be the first to tag this record!