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Consulting P3’s to Raise Funds for Infrastructure Projects

Consulting P3’s to Raise Funds for Infrastructure Projects

In the United States, the number of P3s (Public-Private Partnerships) is expected to grow substantially in the coming years as governments increasingly turn to them as a means of funding public infrastructure works.

 

There are many benefits of using P3s for not only financing, but also the delivery of a project, and that’s why it’s expected that the market will continue to shift in this direction.

 

“The World Economic Forum ranks US infrastructure behind that of most other comparable advanced nations such as Singapore, Germany, and the United Kingdom. And it will get worse: from 2013 to 2020, cumulative US infrastructure needs are estimated to be nearly $3.5 trillion. Fiscal constraints limit how much governments can do on their own, and much has been written about how public-private partnerships (P3s) can be a viable option for filling this financing gap. But most overlook P3s’ ability to address many of the nonfinancing pain points in infrastructure development and delivery.”

 

-https://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/the-rising-advantage-of-public-private-partnerships

 

With a strategic, well-thought-out approach utilizing P3s, governments can potentially mitigate the schedule delays and overruns that currently plague infrastructure project delivery. Allocating shared risk, clearly delineating governance, applying all the industry’s best practices, integrating resources, and establishing a life cycle-long perspective for accountability and costs can lead to improved project delivery for all public infrastructure projects.

 

In general, institutions face many recurring challenges when it comes to capital project portfolios, and many are unrelated to financing. However, P3s can potentially address these problems, which include:

 

 

With all of this in mind, it really seems like a no-brainer to choose P3 funding for your next infrastructure project. However, actually receiving P3 funding can be a bit of a challenge in itself.

 

If you are seeking P3 funding for a public infrastructure project, the first thing you should do is figure out the details of the project and the overall cost target you are looking for. In other words, consider the up-front and on-going costs (and budgets) and also think about your time frame of completion and other constraints.

 

A Public-Private Partnership will ultimately involve funding coming from multiple sources, which may include Equity Contributions, Debt Contributions, Bank Guarantees, Bond/Capital Markets Financing, and/or an Intercreditor Agreement. With your project laid out, it is safe to begin approaching the financing process and comparing quotes so that you can seek out the best solution for your project.