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Special Purpose Vehicle (SPV) of Public Private Partnership Projects in Asia and Mediterranean Middle East: Trends and Techniques

Author

Listed:
  • Abu Naser Chowdhury

    (School of Civil and Environmental Engineering, Nanyang Technological University, Singapore)

  • Po-Han Chen

    (School of Civil and Environmental Engineering, Nanyang Technological University, Singapore)

Abstract

One of the main reasons for the success of public private partnership (PPP) projects is the creation of a separate commercial venture named “Special Purpose Vehicle” (SPV). SPV provides a good framework for raising funds, linking participants legally and assuring supply, production and marketing of products. SPV brings together various parties like lenders, financial institutions, public sector and export credit agencies, suppliers and off-takers. There is often a lack of precedents to identify attributes of a SPV and the process is further hampered by undeveloped financial and legal structures of a country. Thus, there is a need to establish clear attributes for a SPV to raise the funding options of PPPs. In search of these essential attributes, six PPP projects in Asia and Mediterranean Middle East are examined in this paper. Three are independent power producers (IPP), one each from India, Pakistan and China, and three are desalination Projects, one each from Israel, Singapore and Algeria. The evidence shows that not only are there common trends and techniques that are used for SPV development but also some unique features to overcome financial and legal hurdles. The evidence also gives insights for using SPV to improve financing of PPP projects.

Suggested Citation

  • Abu Naser Chowdhury & Po-Han Chen, 2010. "Special Purpose Vehicle (SPV) of Public Private Partnership Projects in Asia and Mediterranean Middle East: Trends and Techniques," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 2(1), pages 64-88, April.
    • Handle: RePEc:umk:journl:v:2:y:2010:i:1:p:64-88
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    File URL: http://ijie.um.edu.my/RePEc/umk/journl/v2i1/a4.pdf
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    Citations

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    Cited by:

    1. Marina Mikhailovna Pukhova & Irina Anatolievna Merkulina & Dmitry Yuryevich Bashkov, 2021. "Developing Public–Private Partnership Projects to Enhance Innovation Capability in the Defence Industry," Economies, MDPI, vol. 9(4), pages 1-21, October.

    More about this item

    Keywords

    - special purpose vehicle; public-private partnership; project finance;
    All these keywords.

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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