Financial Structuring of Public-Private Partnerships for Road Infrastructure Projects in India

Dr. Esther Malini
Manager (Developmental Projects), L & T – ECC, Chennai, India

Abstract

The Public-Private Partnerships (PPP) scheme has become popular in India as an innovative approach for the development of roads with the involvement of the private sector. The financial structuring of PPP projects is quite complex. The issues involved in arriving at an effective financial structure are discussed. The effect of debt service options on the cash flow situation and the intricacies of debt service relationships are explained. The inferences derived are likely to be valuable to prospective concessionaires in preparing for successful negotiations for financial closure.

Keywords: Project Management; PPP projects; Finance; Financial structure; Equity; Debt; Debt-Equity ratio; Debt Service; Cash Flow; Road infrastructure.

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