Project Finance

FMI provides project financing advisory services involving Public-Private Partnerships (P3). Common P3 implementation models are long-term leases, design build finance operate (DBFO), build own operate transfer (BOOT), and build own operate (BOO). P3 project financing is becoming increasingly popular for both economic and social infrastructure projects.

Reasons for P3

• Aging U.S. infrastructure repair/replacement needs exceed the ability of a single entity to provide
• Public entities able to leverage limited funds and deliver projects quickly and efficiently
• Large amount of equity capital currently competing for limited P3 projects
• Private sector can create value through risk transfer, capital structuring, innovation and whole-life cost reduction
• Private project finance offers a debt and equity solution as opposed to a municipal debt only solution
• Financing method widely and successfully used in Australia, Canada, Latin America and Europe
• Success of projects depends on cooperation of public and private partners in performing proper diligence and determining a proper risk allocation based on multiple factors (political, regulatory, financial, construction, operational and maintenance)