OBJECTIVE

In this part of the P3 business case, the project sponsor should:

• Outline the assumptions made with respect to the financing of the project under both the PSC and the Shadow Bid; and

• Clearly outline any assumptions with respect to the level and timing of public and private sector financing, including assumptions on public sector capital injections during the construction of the project (e.g., milestone payments) and at substantial completion (substantial completion payment). Any assumptions on public sector capital injections should not include PPP Canada funding.

Figure 9: Illustrative project financing assumptions

Private Sector Financing (Shadow Bid)	Public Sector Financing (PSC)
Financing Structure Bond or bank financing Timing of debt draws Debt to equity ratio Timing of equity injection Debt service coverage ratio	Financing Structure Timing of borrowing Tenor and repayment frequency
Financing Costs Base interest rate Credit spread Required return on equity Reserve account requirements Upfront fees Standby fees Costs payable at financial close	Financing Costs Base interest rate Credit spread Borrowing fees Costs payable at financial close