Rating Agency P3
Partnerships: the Next Generation of Infrastructure Finance
Prepared by FITCH, this technical paper investigates
infrastructure requirements in developed and developing nations
and finds that they are beginning to exceed available financing
resources. This funding gap has lead to widespread acceptance
that the private sector, in partnership with the public sector,
might have to play a larger role in infrastructure financing.
This role could be active - in the form of project sponsorship
- or passive - in the form of an institutional bond investor.
This paper sees more promise in the latter role. A 'new generation'
of public-private partnerships (P3s) is described, wherein
project credit risk is pooled through infrastructure banks
and layers of credit enhancement are added to engage domestic
debt markets. The role of the private sector in such arrangements
is to act as the financial engineers, creating enhanced investment
vehicles and stimulating the efficient use of capital. For
such partnerships to truly succeed, host countries will need
to promote a relatively stable macroeconomic environment,
develop a legal and regulatory framework for infrastructure
projects, and foster the development of a domestic debt market.
Until such conditions have been achieved, multilateral and
development banks will still have a significant role to play
in project financing.
Toll Road Rating Guidelines
These guidelines are intended to cover the broad spectrum of permutations
in toll road types and management structures. The report describes Fitch's
view in more detail and guides readers through the analytical framework used
in assessing the credit quality of various types of toll roads and financing