A study on financial_research

May 28th, 2015
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Abraham Lincoln University
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The [Korean] government announced a fiscal stimulus package in response to the financial crisis with more than 15 percent of the envisaged investment to be carried out through PPPs. The package is accompanied by measures to reduce financial burdens on PPPs, smooth interest rate changes, and shorten project implementation. The measures introduce: (i) lower equity capital requirements on concessionaires (5–10 percent); (ii) for large-scale projects, higher ceilings on guarantees provided by the Infrastructure Credit Guarantee Fund (50 percent); (iii) help in changing equity investors for some projects; (iv) compensation for the preparation of proposals to encourage more vigorous competition during bidding; (v) sharing of interest rate risks with concessionaires; (vi) compensation for the excess changes in base interest rates through grading of risks at the time of the concession agreement; and (vi) shorter periods for readjusting benchmark bond yields.

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PPP and Financial crises 2008-2010Filip DrapakWorld Bank InstituteMay 20102Content of presentation Financial crises and infrastructure Impact on PPP Regional and global impact Governance Finance Guarantees Procurement Development institutions and PPPs3Government response in terms of issues1) Liquidity:(a) direct lending in form of parallel financing (EIB, funding facilities in France andGermany)(b) role of lender of last resort (TIFU in UK used for Manchester waste project)(c) policy measures enabling solutions to liquidity issues (DFC, short term financing oflong term projects)2) Capital allocation:(a) Debt guarantees (France, Spain, Portugal, Slovakia)(b) Underpinning (France, Germany, Poland)(c) Indirect guarantees (Sub-sovereign guarantees, Loan Guarantee for Ten Tprojects)3) De-risking of projects measures(a) swapping payment mechanisms(b) braking the projects up in several tranches(c) support guarantees on particular risks(d) structuring/ROE support (supplementary income, funding contribution optimization)4Policy and Governance implications Procurement has to be more flexible, shorter and financial market risk sensitiveMarket flexibility and procurement flexibilityProcuring authorities are suffering from the higher financing costs and bankfees, as well as greater transaction costs from procedures and negotiationsthat are taking longer to conclude. One risk is that final bids that were thoughtt

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