There are a number of constraints that need to be considered in attempting to revive and expand the interest of capital markets investors in PPPs. These fall into two broad categories: reasons for the retreat from PPP and obstacles to re-entry and expansion of activity.
Reasons for the retreat from PPP:
■ Impairment of the value of the existing portfolio
■ Portfolio imbalance
■ Attractive alternative investments
Obstacles to re-entry and expansion:
■ Lack of analytical and structuring capability among many investors
■ Structuring difficulties around project control
■ Lack of a clear asset class for performance benchmarking
■ Lack of a designated pool of capital
■ Variable appetite for construction risk
■ Currency constraints
■ Rating hurdle