Government Support for PPPs

Governments will only attract private participation in infrastructure if investors are confident of earning a reasonable return. For countries that do not have mature PPP markets, investors also want government support or guarantees for a certain degree of risk-and governments can improve the bankability of projects by using support instruments such as equity, debt relief, grants, guarantees, fiscal incentives, and contract clauses based on project needs. The Republic of Korea provides financial support through subsidies to resolve financial feasibility problems that may occur on infrastructure PPPs; the Philippines and Indonesia use viability gap funding.

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