• Public-Private Partnerships: The Next Generation of Infrastructure Finance: Prepared by Fitch Ratings, 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 (PPPs) 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.
• Project Finance Summary: Debt Rating Criteria: Prepared by Fitch Ratings, this document provides a comprehensive review of the risks facing project-financed infrastructure, from the perspective of a lender. A rigorous framework is presented. Project-level risks include construction, operations and technology risk, as well as contractual design. Also relevant to the overall risk assessment are sovereign risk, level of legal institutional development and force majeure. Credit enhancements such as guarantees and escrow accounts are discussed. By describing the factors important to lenders to infrastructure projects, this document will help project designers ensure that their projects are financeable.
• Global Toll Road Rating Guidelines - Exposure Draft: Prepared by Fitch Ratings and issued in September 2006 as a companion to the report cited above to guide readers through the analytical framework used in assessing the credit quality of various types of toll roads and financing structures and the treatment of risks associated with these types of facilities. Toll roads are an important way to finance a PPP project due to the cash flow potential of the toll facilities, whether new or existing. Hence they generally provide enhanced opportunities to apply some of the more sophisticated forms of PPPs, such as long-term leases or Concessions.