Dealing with Public Risk in Private InfrastructureTimothy Irwin World Bank Publications, 1997 - 155 pages Many infrastructure privatizations still leave governments and thus taxpayers exposed to significant financial risks. This book examines these risks and considers how governments should respond to investors' requests for guarantees and other forms of government support. The report examines how governments can decide which risks to bear and which to avoid, how they can reduce the risks that private investors face without giving guarantees, and how they can measure, budget, and account for the risks they do take on. |
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Common terms and phrases
agencies allocation antees Argentina assets bilateral investment treaties budget budgetary capital cash Chile Colombia commitments compensation competitive concession contingent liabilities contract CORELCA costs coverage currency debt default demand risk developing countries Development Bank economic efficiency enterprises equity ernment example exchange rate expected loss export credit export credit agencies expropriation firms fiscal foreign exchange franchise holder funds government guarantees government's guar guaran host government incentives increase interest rate risk investment treaties issues loan guarantees LPVR auctions macroeconomic ment MIGA million multilateral multilateral development banks operating OPIC options payments percent political and regulatory political risk insurance portfolio present value private infrastructure projects private insurers private investors private sector project finance reduce reforms regulation regulatory framework regulatory risks renegotiation require reserves revenue risk management risk-bearing sovereign tariffs taxpayers term tion toll road United Kingdom user fees value at risk World Bank
Popular passages
Page 56 - By that standard the return to the equity owner should be commensurate with returns on investments in other enterprises having corresponding risks. That return, moreover, should be sufficient to assure confidence in the financial integrity of the enterprise, so as to maintain its credit and to attract capital.
Page 61 - Compensation shall be equivalent to the fair market value of the expropriated investment immediately before the expropriation took place ("date of expropriation"), and shall not reflect any change in value occurring because the intended expropriation had become known earlier.
Page 62 - ... (e) proceeds from the sale or liquidation of all or any part of an investment; and (f) additional contributions to capital for the maintenance or development of an investment.
Page 62 - Notwithstanding the provisions of paragraphs l and 2, either Party may maintain laws and regulations ; (a) requiring reports of currency transfer; and (b) imposing income taxes by such means as a withholding tax applicable to dividends or other transfers. Furthermore, either Party may protect the rights of creditors, or ensure the satisfaction of judgements in adjudicatory proceedings, through the equitable, non-discriminatory and good faith application of its law.
Page 62 - ... into account the nature of the investment, the circumstances in which it would operate in the future and its specific characteristics, including the period in which it has been in existence, the proportion of tangible assets in the total investment and other relevant factors pertinent to the specific circumstances of each case. 6. Without implying the exclusive validity of a single standard for the fairness by which compensation is to be determined and as an illustration of the reasonable determination...
Page 61 - Each Party shall permit all transfers related to an investment to be made freely and without delay into and out of its territory.
Page 62 - State according to reasonable criteria related to the market value of the investment, ie, in an amount that a willing buyer would normally pay to a willing seller after taking into account the nature of the investment, the circumstances in which it would operate in the future and its specific characteristics, including the period in which it has been in existence, the proportion of tangible assets in the total investment and other relevant factors pertinent to the specific circumstances of each case....
Page 62 - fair market value" will be acceptable if conducted according to a method agreed by the State and the foreign investor (hereinafter referred to as the parties) or by a tribunal or another body designated by the parties. 5. In the absence of a determination agreed by, or based on the agreement of, the parties, the fair market value...
Page 62 - ... with a proven record of profitability, on the basis of the discounted cash flow value; (ii) for an enterprise which, not being a proven going concern, demonstrates lack of profitability, on the basis of the liquidation value; (iii) for other assets, on the basis of (a) the replacement value or (b) the book value in case such value has been recently assessed or has been determined as of the date of the taking and can therefore be deemed to represent a reasonable replacement value. For the purpose...
Page 62 - Party shall permit transfers to be made in a freely usable currency at the market rate of exchange prevailing on the date of transfer with respect to spot transactions in the currency to be transferred.