1, Viability Gap Funding (Viability Gap Funding), refers to the user fee is not enough to meet the social capital or the project company cost recovery and reasonable return, and by the government in the form of financial subsidies, equity inputs, preferential loans and other preferential policies, the economic subsidies given to the social capital or the project company.
2. PPP (Public-Private-Partnership) projects are a marriage between the government and social capital. In an outbound PPP project, our Chinese company, as the social capital from outside the host country, should lay the groundwork during the relationship period (pre-project in terms of legal, contractual, and investment structure design) in order to ensure a harmonious and stable marriage over the decades of the project cycle and to secure a proactive position in case of a crisis.
With the further development of the Belt and Road strategy, a large number of Chinese energy and infrastructure companies are exploring and launching "going out" to participate in overseas PPP projects.
In a Public-Private-Partnership (PPP) project, the Chinese company (whether state-owned or private) is the second "P", i.e., "Private" from outside the host country. In a Private-Partnership project, the Chinese company (whether SOE or private) acts as the second "P", i.e., a "Private" investor from outside the host country, and enters into a multi-decade project agreement with the first "P" (the host country's government, or a state-owned company acting on behalf of the government), to build, finance, operate, and maintain the host country's key infrastructure and energy project assets.
3. In early May 2017, the Ministry of Finance, the National Development and Reform Commission (NDRC), the Ministry of Justice (MOJ), the Central Bank, the China Banking Regulatory Commission (CBRC), and the China Securities Regulatory Commission (CSRC) jointly issued the Circular on Further Regulating the Behavior of Local Governments in Debt Financing, which strictly prohibits local governments from utilizing PPPs to raise debt in disguise.
Expanded:
Other terms for ppp projects:
1. Whole Life Cycle (Whole Life Cycle), refers to the complete cycle of the project from the design, financing, construction, operation, maintenance to the termination of the transfer.
2. Output
Specification (Output
Specification), refers to the economic and technical standards that should be achieved by the project assets after the completion of the project, as well as the scope of delivery of the public **** products and services, standards and performance levels.
3. Value for Money (
VFM), refers to the long-term maximum benefit that an organization can obtain by applying its available resources.VFM evaluation is a commonly adopted international assessment system for evaluating whether or not public ****products and services traditionally provided by the government are amenable to the use of the government-social capital cooperation model, which is aimed at achieving the optimal utilization efficiency of the allocation and use of public ****resources, as well as the scope of delivery and the level of performance of the project. **resource allocation and utilization efficiency optimization.
4. Public Sector Comparator (
PSC), refers to the present value of all the costs of providing public *** products and services by the government using the traditional procurement mode during the whole life cycle, which mainly includes the net cost of construction and operation, the cost of transferable risk bearing, the cost of retaining the risk bearing, and the cost of competitive neutralization. Adjustment costs, etc.
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