P3?

Principles of P3 Projects Types Common P3 Models P3 Structure

A Public–Private Partnership (PPP or 3P or P3) is a government service or private business venture that is funded and operated through a partnership of government and one or more private sector companies Principles of P3

Financing - who, at the outset, raises the cash. Funding - who ultimately pays for it over the long term –end user - taxpayer/customer Note: the private sector will want to be repaid for its investment i.e. for the finance it has provided. Principles of P3

P3 Considerations Service Requirement Revenue Stream Risk Transfer Value for Money Principles of P3

Electricity Water Gas Types of Project

Types of Project

Types of Project

Types of Project

Types of Project

First P3 - Dartford River Crossing UK Contract Signed in 1988 Completed in 1991 Types of Project

Types of Project

Design Build Arrangement Operations Concession Arrangement Government Services Contract Management Contract Design Build Arrangement Operations Concession Arrangement Design Build Operate Maintain Design Build Finance Operate Build Operate Transfer Build Own Operate Privatisation P3 Models

Government SC MSA DB OCA DBOM DBFO BOT BOO Privatisation P3 Models

Financing Methods Banks Bonds Equity Funds P3 Models

Off Balance Sheet Reporting Political (want) driven programmes P3 Issues/Concerns Off Balance Sheet Reporting Political (want) driven programmes Rates of Borrowing IRR v Income Risk P3 Models)

Project Co Representative Chief Executive Officer of Arctic Infrastructure Limited Partnership (AILP) Project Co Representative (PCo) Special Purpose Company/Vehicle Project Director (SPC/SPV) P3 Structure

Client Project Co Design-Builder Service Provider (SPV/SPC) Design-Builder Service Provider P3 Structure

P3 Structure

Project Agreement P3 Structure Shareholders Agreement Financing Agreements Design-Build Agreement Services Contract Parent Company Guarantee Interface Agreement Parent Company Guarantee P3 Structure

Design-Build Agreement Project Agreement Schedule Description 16 Financial Model 18 Lenders Remedies Agreement 26 Planned Refinancing 27 Project Co’s Ownership Information Design-Build Agreement Interface Agreement Services Contract Schedule Description 4 Project Schedule 5 Design and Construction Protocols 6 Design and Construction Specifications Schedule Description 7 Services Protocols & Specification 11 Communication 12 Third Party Agreements P3 Structure

Shareholders 10% P3 Structure

Lenders Technical Advisor Bondholders 45% Trustee Lenders Technical Advisor P3 Structure

Independent Certifier Capital Funding 40% Independent Certifier P3 Structure

Spend During Construction Period Design & Construction Operating & Maintenance SPV Life Cycle Senior Debt Fees Senior Debt Interest P3 Structure

Spend During Operation Period Operating & Maintenance Life Cycle SPV Senior Debt Service Equity Distributions P3 Structure

AILP Consultants Design Builder Service Provider P3 Structure

Independent Certifier Lenders Technical Advisor Shareholders Capital Funding Bondholders Trustee Independent Certifier Lenders Technical Advisor AILP Consultants Design Builder Service Provider P3 Structure

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