Private Power Financing : From Project Finance to Corporate Finance
Project financing of independent power producers (IPPs) may seem the only solution to the intractable problem of getting private credit to the power sector. In the developing world, however, the public-private partnership in project-financed IPP ve...
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| Format: | Viewpoint |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/1995/10/441232/private-power-financing-project-finance-corporate-finance http://hdl.handle.net/10986/11644 |
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okr-10986-116442021-06-14T11:04:06Z Private Power Financing : From Project Finance to Corporate Finance Jechoutek, Karl G. Lamech, Ranjit AFFILIATE BALANCE SHEET BALANCE SHEETS BONDS CAPITAL MARKETS CAPITALIZATION CASH FLOWS CONSOLIDATION CORPORATE FINANCE COST OF CAPITAL CREDITWORTHINESS DEBT ELECTRICITY EQUITY MARKETS FINANCIER GOVERNMENT GUARANTEES LIQUIDITY MATURITIES PRIVATE SECTOR PROJECT FINANCING PUBLIC SERVICE STOCK MARKETS SUBORDINATED DEBT UTILITIES PROJECT FINANCE VENTURE CAPITAL ENERGY INDUSTRIES CORPORATE FINANCE EQUITY PUBLIC SERVICES BALANCE SHEETS INDEPENDENT POWER PRODUCERS RECOURSE Project financing of independent power producers (IPPs) may seem the only solution to the intractable problem of getting private credit to the power sector. In the developing world, however, the public-private partnership in project-financed IPP ventures has been slow to produce results. To achieve substantive progress in IPP financing, limited recourse project financing will have to evolve toward structures with greater balance sheet support. First, balance sheet support by the main partners in an IPP financing offers greater security to lenders and provides easier access to long-term debt. Second, balance sheet support by IPP sponsors can open access to public equity markets, which are deeper and generally cheaper. Third, increased corporate balance sheet support is a corollary to the restructuring in the world s power sectors. Greater corporate finance support will make it possible to raise private capital for independent power financing from wider, deeper, and cheaper sources. This Note recommends the following strategies: 1) Encourage the formation of large, well-capitalized independent generation companies. 2) Encourage divestiture of commercially operating generation plants by incumbent utilities to IPP developers. 3) In IPP prequalification under competitive bidding, give greater weighting to IPP developers with business listed on a stock exchange and to those with well-capitalized balance sheets. 4) Encourage project sponsors to use balance sheet support for the financing plan in order to increase corporate financing. 2012-08-13T15:37:05Z 2012-08-13T15:37:05Z 1995-10 http://documents.worldbank.org/curated/en/1995/10/441232/private-power-financing-project-finance-corporate-finance Viewpoint. -- Note No. 56 (October 1995) http://hdl.handle.net/10986/11644 English Viewpoint CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Viewpoint Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
AFFILIATE BALANCE SHEET BALANCE SHEETS BONDS CAPITAL MARKETS CAPITALIZATION CASH FLOWS CONSOLIDATION CORPORATE FINANCE COST OF CAPITAL CREDITWORTHINESS DEBT ELECTRICITY EQUITY MARKETS FINANCIER GOVERNMENT GUARANTEES LIQUIDITY MATURITIES PRIVATE SECTOR PROJECT FINANCING PUBLIC SERVICE STOCK MARKETS SUBORDINATED DEBT UTILITIES PROJECT FINANCE VENTURE CAPITAL ENERGY INDUSTRIES CORPORATE FINANCE EQUITY PUBLIC SERVICES BALANCE SHEETS INDEPENDENT POWER PRODUCERS RECOURSE |
| spellingShingle |
AFFILIATE BALANCE SHEET BALANCE SHEETS BONDS CAPITAL MARKETS CAPITALIZATION CASH FLOWS CONSOLIDATION CORPORATE FINANCE COST OF CAPITAL CREDITWORTHINESS DEBT ELECTRICITY EQUITY MARKETS FINANCIER GOVERNMENT GUARANTEES LIQUIDITY MATURITIES PRIVATE SECTOR PROJECT FINANCING PUBLIC SERVICE STOCK MARKETS SUBORDINATED DEBT UTILITIES PROJECT FINANCE VENTURE CAPITAL ENERGY INDUSTRIES CORPORATE FINANCE EQUITY PUBLIC SERVICES BALANCE SHEETS INDEPENDENT POWER PRODUCERS RECOURSE Jechoutek, Karl G. Lamech, Ranjit Private Power Financing : From Project Finance to Corporate Finance |
| relation |
Viewpoint |
| description |
Project financing of independent power
producers (IPPs) may seem the only solution to the
intractable problem of getting private credit to the power
sector. In the developing world, however, the public-private
partnership in project-financed IPP ventures has been slow
to produce results. To achieve substantive progress in IPP
financing, limited recourse project financing will have to
evolve toward structures with greater balance sheet support.
First, balance sheet support by the main partners in an IPP
financing offers greater security to lenders and provides
easier access to long-term debt. Second, balance sheet
support by IPP sponsors can open access to public equity
markets, which are deeper and generally cheaper. Third,
increased corporate balance sheet support is a corollary to
the restructuring in the world s power sectors. Greater
corporate finance support will make it possible to raise
private capital for independent power financing from wider,
deeper, and cheaper sources. This Note recommends the
following strategies: 1) Encourage the formation of large,
well-capitalized independent generation companies. 2)
Encourage divestiture of commercially operating generation
plants by incumbent utilities to IPP developers. 3) In IPP
prequalification under competitive bidding, give greater
weighting to IPP developers with business listed on a stock
exchange and to those with well-capitalized balance sheets.
4) Encourage project sponsors to use balance sheet support
for the financing plan in order to increase corporate financing. |
| format |
Publications & Research :: Viewpoint |
| author |
Jechoutek, Karl G. Lamech, Ranjit |
| author_facet |
Jechoutek, Karl G. Lamech, Ranjit |
| author_sort |
Jechoutek, Karl G. |
| title |
Private Power Financing : From Project Finance to Corporate Finance |
| title_short |
Private Power Financing : From Project Finance to Corporate Finance |
| title_full |
Private Power Financing : From Project Finance to Corporate Finance |
| title_fullStr |
Private Power Financing : From Project Finance to Corporate Finance |
| title_full_unstemmed |
Private Power Financing : From Project Finance to Corporate Finance |
| title_sort |
private power financing : from project finance to corporate finance |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/1995/10/441232/private-power-financing-project-finance-corporate-finance http://hdl.handle.net/10986/11644 |
| _version_ |
1764417483205246976 |