ROLE OF DIFFERENT STAKEHOLDERS AND FINANCIAL MECHANISM OF MHI Financial sources and mechanism of creation of multilateral investment fund to develop the Model Highway Prospects of creation of a pool of companies (or a management company) to operate the ancillary infrastructure Report by Juliette Passer, Esq., for International Project Development Group and PanaManagement Corporation, NY, USA in Batumi, Georgia October 10, 2011 International Project Development Group New York Office: Panamá City Office: Telephone: Telephone:

Public Private Partnerships or PPPs as Means of Financing Infrastructure in Central Asia and MHI Projects Introduction: PPPs have been used in developed countries in a wide range of sectors, and they are increasingly being seen as part of solutions to the lack of infrastructure services in developing countries. However, PPPs can fulfil this role only if they appropriately combine the interests of the two partners, i.e. (i) the interests of the government in expanding and improving services for citizens that are sustainable and (ii) the interests of private investors in obtaining reasonable returns on their investment for the risks they incur. International Project Development Group New York Office: Panamá City Office: Telephone: Telephone:

International Project Development Group New York Office: Panamá City Office: Telephone: Telephone: Notion of Project Finance: Private sector finance for PPP projects normally consists of a mixture of equity, provided by investors in the project, and third-party debt, provided by banks or through financial instruments such as bonds.

International Project Development Group New York Office: Panamá City Office: Telephone: Telephone:

International Project Development Group New York Office: Panamá City Office: Telephone: Telephone:

As an alternative for the Project Company and more in line with multinational projects – a Central Asian Infrastructure Fund (CAIF) could also be established to funnel regional and international savings and investments toward regional infrastructure development projects through investment in various special purpose companies International Project Development Group New York Office: Panamá City Office: Telephone: Telephone:

International Project Development Group New York Office: Panamá City Office: Telephone: Telephone:

International Project Development Group New York Office: Panamá City Office: Telephone: Telephone:

Alternatives to traditional public financing are playing an increasing role in the development of infrastructure. In recent years, new infrastructure investment in various countries has included projects with exclusively or predominantly private funding sources. The two main types of funding are debt finance, usually in the form of loans obtained on commercial markets, and equity investment. International Project Development Group New York Office: Panamá City Office: Telephone: Telephone:

International Project Development Group New York Office: Panamá City Office: Telephone: Telephone:

International Project Development Group New York Office: Panamá City Office: Telephone: Telephone:

(i)Equity capital (ii)Commercial loans (iii)“Subordinated” debt (iv)Institutional investors (v)International financial institutions and export credit and investment promotion agencies (vi)Insurers (vii)Political Risk Guarantees and Guarantee Funds (viii)Other Forms of Guarantees International Project Development Group New York Office: Panamá City Office: Telephone: Telephone:

(ix) Independent experts and advisers (x) Capital market funding (xi) Financing by Islamic financial institutions (xii) Financing by international financial institutions (xiii) Support by export credit and investment promotion agencies (xiv) Combined public and private finance (xv) Funding for Project Preparation (xvi) Legal Authority International Project Development Group New York Office: Panamá City Office: Telephone: Telephone:

IPDG LLC, a New York limited liability company, was founded in 1996 by Juliette M. Passer, as its President and General Counsel, a New York licensed attorney with over 20 years of broad international transactional experience, fluent in the Russian and Ukrainian languages. Ms Passer is a member of the Council on Foreign Relations and serves on boards of several companies. She is listed in Who’s Who in American Law and Who’s Who in American Women. The company provides legal and financial consulting to both US and foreign clients involved in many industries. Its associates have an average of over 15 years of experience at major US firms in financial services, investment banking, marketing and management consulting. The clients of IPDG receive personalized and effective representation based on combination of major firms experience and quality at highly competitive rates. International Project Development Group New York Office: Panamá City Office: Telephone: Telephone:

PanaManagement Corporation provides legal and business consulting to both US and foreign clients involved in many industries in transactions in such sectors as aviation, aircraft leasing, transportation, pharmaceuticals, petrochemicals, telecommunications, real estate development, technology transfer, information technology (IT) and the Internet, advertising, clothing manufacturing, defense conversion, energy production and conversion, entertainment, non-profit organizations. Together with its affiliated companies, our associates have combined experience of over 20 years at international and US firms in legal services, strategic business consulting, marketing, and management consulting. International Project Development Group New York Office: Panamá City Office: Telephone: Telephone: