Product payment
Product payment is for the repayment of project loans. Borrowing method in the project after the commissioning of the project directly with the project products to repayment of debt and interest, rather than a form of financial leasing to repay the debt with the sales revenue of the project products. Before the loan is repaid, the lender owns part or all of the project products, the borrower in the debt settlement of the lender's loan as the net value of the discounted income from the sale of these products. This form of product payment in the United States of America's oil, gas and mining project financing is most commonly used, is characterized by: used to pay off the principal and interest of the debt is the sole source of the project's products: loan repayment period should be shorter than the project's effective period of production; the lender does not bear direct responsibility for the project's operating costs.
Financial leasing
is a special form of debt financing, i.e., if funds are needed to purchase a certain piece of equipment in the construction of a project, a financial institution can apply for a financial lease. The financial institution to purchase this equipment, leased to the project construction unit, the construction unit to pay the financial institution to lease the equipment rent in installments. Financial leasing is commonly used in asset-based financing, especially in the financing of the purchase of aircraft and ships, as well as in the preparation of large-scale power projects can also use financial leasing.
BOT financing
BOT financing is the private sector to participate in the construction of infrastructure, to provide public **** services to the community in a way. BOT mode in different countries have different names, our country is generally referred to as "concession". The superiority of BOT financing mainly has the following aspects: first of all, to reduce the impact of the project on the government budget, so that the government can in the case of insufficient funds of their own, but still be able to start some infrastructure projects. The government can concentrate its resources on projects that are not favored by investors but are of great strategic significance to the local government.BOT financing does not constitute the government's external debt, which can improve the creditworthiness of the government, and the government does not have to suffer from debt repayment. Secondly, introducing efficiency from the private sector into public projects can greatly improve the quality of project construction and speed up its progress. At the same time, the government transfers the entire project risk to the private sponsor. Thirdly, attracting foreign investment and introducing advanced technology and management methods from abroad will have a positive impact on local economic development.BOT investment method is mainly used to build infrastructure projects such as toll roads, power plants, railroads, wastewater treatment facilities and urban subways.
BOT is important, in addition to the above common modes, BOT has more than 20 evolutionary modes, the more common are: BOO (Build-Operate-Own), BT (Build-Transfer), TOT (Transfer-Operate -Transfer), BOOT (Build-Operate-Own-Transfer), BLT (Build-Lease-Transfer), BTO (Build-Transfer -Operate), etc.
TOT financing
TOT (Transfer-Operate-Transfer) is "Transfer-Operate-Transfer "refers to the government and investors signed a franchise agreement, the operation of the public **** facilities have been put into operation can be revenue project transferred to private investors, by virtue of the facility in the next few years, a one-time from the hands of the investor to finance a sum of money for the construction of new infrastructure projects; franchise period, the investor and then transfer the facility free of charge to the government to manage. to the government for management.
The TOT method is significantly different from the BOT method in that it does not require the investor to invest directly in the construction of the infrastructure, and therefore avoids a large number of risks and contradictions arising from the process of infrastructure construction, and it is easier for the government and the investor to come to an agreement.
The TOT method is mainly applicable to the construction of transportation infrastructure.
Recently, there has been a combination of TOT and BOT project financing mode in foreign countries, but the main financing mode of BOT is called TBT. In the TBT mode, the implementation of TOT is auxiliary, and it is mainly used to facilitate the BOT. The first is that the public organization transfers the operating right of the constructed facility in return for a fee through TOT, and after obtaining the funds, it will invest the funds in the BOT project company and participate in the construction and operation of the newly constructed BOT project until the operating right is finally recovered. The second is gratuitous transfer, i.e., the public organization will transfer the operating right of the constructed facility to the investor in the form of TOT without any compensation, but on the condition that it will share with the BOT project company the operating income of the proposed project after its completion in accordance with an incremental ratio. Of the two models, the former is less common.
For a long time, China's transportation infrastructure development is seriously lagging behind the development of the national economy, the contradiction between the shortage of funds and investment demand is very prominent, TOT mode to alleviate the contradiction between the supply and demand of funds for the construction of China's transportation infrastructure to find a realistic way out, which can accelerate the construction and development of transportation infrastructure.
PPP financing mode
PFI mode and PPP mode is the last few years the development of foreign countries very quickly in the field of two private investment in the field of public **** investment mode, although in our country is still in its infancy, but has a good reference role, but also China's public **** investment in the field of investment and financing system reform is a development direction.
PPP (Public Private Partnership), that is, the cooperation mode between the public **** sector and private enterprises, is a project financing mode for public **** infrastructure. Under this model, private enterprises are encouraged to cooperate with the government and participate in the construction of public **** infrastructure.
With its Chinese meaning: public ****, private, partner, the PPP model is constructed as: from the demand of public **** undertakings, using the advantages of the industrialization of private resources, through the cooperation between the government and private enterprises on both sides of the **** with the development, investment and construction, and maintenance of the operation of the public **** undertakings of the cooperation model, that is, the government and the private economy in the field of the **** of the public sector partnership. Through this form of cooperation, the cooperating parties can achieve more favorable results than they would expect to achieve individually. When the cooperating parties participate in a project, the government does not transfer all the responsibility for the project to the private sector, but rather the cooperating parties*** share the responsibility and financing risks. This is a worldwide issue that has been formally approved by the State Planning Commission, the Ministry of Science and Technology, and the United Nations Development Program tripartite meeting to be included in the ongoing implementation of China's local Agenda 21 capacity building projects.
PFI financing model
PFI is based on the government's purchase of services from the private sector, this approach is currently used for social welfare construction projects, it is not difficult to see that this approach is mostly used by those developed countries that already have a relatively complete hardware infrastructure. Comparatively speaking, developing countries due to the limitations of the economic level, more resources are invested in places that can directly or indirectly produce economic benefits, and the importance of these infrastructures in national production is difficult to make the government to give up its ultimate ownership.
PFI projects always have a certain focus on application areas in developed countries, taking Japan and the United Kingdom as an example, in terms of quantity, Japan's focus areas from high to low are social welfare, environmental protection and infrastructure, and the United Kingdom is social welfare, infrastructure and environmental protection. In terms of capital investment, Japan's three areas of infrastructure, social welfare and environmental protection only account for 7%, 52% and 1% of the UK's, which shows that its scale is much smaller compared to the UK. Current PFI projects in the UK are very diverse, with the largest projects coming from the Ministry of Defense, such as the air-to-air refueling tanker program, the military flight training program, and airport service support. More typical projects are the construction of relatively small facilities, such as educational or civic buildings, police stations, hospital energy management or highway lighting, and larger ones include highways, prisons, and hospital buildings.
ABS financing. That is, asset benefit securitization financing. It is a project financing method to raise funds by issuing bonds in the capital market through a set of credit rating improvement programs guaranteed by the expected returns that can be brought by the project assets. The specific operation process is: (1) Formation of a special target company. (2) The target company selects objects capable of securitization financing. (3) The right to future cash income from government projects is transferred to the target company by contract, agreement, etc. (4) The target company raises funds by issuing bonds directly in the capital market or by other institutions organized by the target company's credit guarantee, and uses the funds raised for project construction. (5) The target company pays off the principal and interest of the bonds through the cash inflow from the project assets.
Case:
BOT financing: China's first BOT project was the Guangdong Shajiao B power plant invested and constructed in 1984 by Hong Kong's Hu Yingxiang's Hopewell Group, with a total investment of 4.2 billion Hong Kong dollars, which was completed and put into operation in 1987, and handed over back to the local government in October 1999. As there were no relevant regulations in this area in China at that time for reference, the operation was very irregular, and the two parties in the cooperation were entangled in many issues for a long time. The first domestic application of standardized international BOT financing model construction of public **** infrastructure projects is August 3, 1994 signed the Beijing Jingtong Expressway. The investor was the U.S. Lin Tongyan China Company, with an investment of RMB 1.3 billion and a special operating life of 20 years. The project was completed on May 1, 1996 and opened to traffic.
China's application of BOT mode of financing the construction of the more representative projects are also Guangxi Laibin Power Plant B plant, Chengdu, Sichuan water plant six plant B plant, Shanghai Huangpu River Yan'an East Road Tunnel Repeat Project, Hainan East Highway and so on.
ABS financing: less, 1996 Zhuhai Expressway and 1997 Guangzhou-Shenzhen Expressway asset securitization operation is China's infrastructure toll securitization of useful attempts for China's future infrastructure toll securitization financing has accumulated valuable experience.
Financial Leasing: In February 2006, ICBC completed the first overseas aircraft operating lease financing project in China, arranging with BNP Paribas*** an overseas operating lease financing of USD 34 million for the introduction of a Boeing 737-700 passenger aircraft by Air China Limited. This is the first overseas aircraft operating lease financing project arranged and implemented by a Chinese commercial bank in China. The cooperation between ICBC and BNP Paribas not only breaks the monopoly of foreign banks in the field of overseas aircraft operating lease financing projects, but also is an innovation for ICBC to actively adjust the varieties of aircraft financing business.