REVIEW
of
FINANCE -
Jan. 2018
39
UsingSource can improve thequalityof project
preparation by public sector and strengthen
their technical capacities and abilities to manage
risks. This makes infrastructure projects become
more attractive to the private sector.
Report on Risk mitigation and allocation
in infrastructure, including public private
partnerships in APEC economies is built by
coordination among GIH, ADB, OECD and
discussions held by the APEC members at the
APEC Seminar on long term investment in
infrastructure. This report provides an overview
of the type of risks in infrastructure projects
and the tools available to policymakers and
contracting authorities effectively manage and
allocate risks amongst the various stakeholders.
It includes four contents: (i) Analysis of risks
in infrastructure financing, (ii) Risk transfer by
contractual arrangements, (iii) Risk mitigation
instruments and blended finance approaches to
facilitate private investment, (iv) Selected good
practices and case studies.
It is an useful reference for APEC members,
particularly APEC members with lack of
experience in PPP transactions, to deeply
understand kinds of risk of infrastructure
projects in terms of politics and regulations,
macroceconomic and business, technical. It
describes how risk transfers among the project
companies and other subcontractors in PPP
contracts as well as project finance transactions.
A range of risk mitigation instruments in
infrastructure projects, such as guarantees,
insurance and some of the blended finance
approaches, for example loan syndiction
infrastructure projects, lower funding cost and
attract more capital.
Thirdly
, an optimise risk allocation align with
appropriate risk mitigation instruments is a key
to improve confidence from investor and success
of PPP transactions.
Fourthly
, institutional investors (such as
pension funds, insurances, sovereign wealth
funds, etc) are potential sources for long
term investment in infrastructure. In order to
attract institutional investors, infrastructures
needs to be structured as attractive investment
opportunities, providing revenue streams and
risk-return profiles that match investors’ return
expectations and liability structures.
Fifthly,
policy framework and regulations
play an important role to foster private to engage
in investment into infrastructure projects.
In terms of building capacity, Viet Nam,
Peru and China collaborated with Sustainable
Infrastructure Foundation (SIF) and ADB
organized training courses on using Source.
Source, initiated by Multilateral Development
Banks and ADB, provides the public sector with
an infrastructure project preparation tool, a
project selection tool, a project coordination tool,
a project funding tool, a project financing tool, a
project promotion tool and a project-monitoring
tool. Through a standardised template, it covers
the governance, technical, economic, legal,
financial, environmental and social dimensions
of the project definition. It encompasses the
whole project lifecycle; it is organised in
stages, including the preparation, procurement,
development and operating phases.
TABLE 2: DEVELOPMENT INVESTMENT CAPITAL AT CURRENT PRICE BY ECONOMIC COMPOSITION (VND TRILLION)
Year
Total
By
Investment capital/gross
domestic product
State Economy Non-State Economy Foreign invested sector
2011
924,5
341,6
356,0
226,9
33,3
2012
1010,1
406,5
385,0
218,6
31,1
2013
1094,5
441,9
412,5
240,1
30,5
2014
1220,7
486,8
468,5
265,4
31,0
2015
1367,2
519,5
529,6
318,1
32,6
2016
1.485,1
557,5
579,7
347,9
33,0
9 months
of 2017
1.128,7
401,8
450,4
276,5
33,9
Source: General Statistics Office of Vietnam
