Projects

Public companies or companies with public domain of the state, if the investor is a public entity.

Or, for a private investor, the most common types of business structures considered by foreign companies to operate in Angola are:

• branches, which, although allowing the undertaking of commercial activities in Angola, are not independent legal entities, and thus the foreign parent entity undertakes unlimited liability for the obligations of the branch, and arising out from the performance of its activity in Angola; or
• representative offices, which are merely aimed at developing and following the business of the foreign entity in Angola but are expressly forbidden to conduct any commercial activity in the country; or
• companies (subsidiaries), which in Angola include (i) Private limited liability companies (Sociedades por Quotas), and (ii) Joint Stock limited liability companies (Sociedades Anónimas).

The principal forms of private sector funding/investment in energy and infrastructure in Australia (including in relation to PPPs) are as follows.

Funding

Common forms of funding in energy and infrastructure include:

• debt finance, including:
  • loans made on a project finance basis;
  • loans made on a corporate finance basis (balance sheet debt); and
  • mezzanine debt;
• asset sales;
• federal grants;
• value capture;
• concessional loans;
• asset finance or hire-purchase arrangements; and
• subordinated shareholder loans.

Project finance

Generally, project sponsors prefer debt to be secured on a limited-recourse basis. Limited-recourse means that financiers only take security over the assets of the project itself and its outputs (including revenue) rather than any wider assets of the sponsor and its corporate group This preference is largely driven by the fact that it is only the project’s assets and revenues which are ‘at risk’ of enforcement. This approach enables project sponsors to retain flexibility with respect to their other ventures.

A common structure for project finance involves incorporating a special purpose vehicle for the project (Project Co). The Project Co then enters into a range of documents for the delivery of the project including the project documents (relating to construction and operation of the project) and the finance documents (relating to the financing of the project).

In order to secure this funding, the project needs to stack up from a ‘bankability’ perspective. In essence, bankability is a term used to describe:

• the willingness of financiers to fund the project based on security of cash flows (in and out) of the project; and
• the minimization of any residual risk held by the Project Co receiving the funding.

Corporate finance

Debt based on corporate finance facilities may be utilized where a project is not sufficiently bankable to receive limited recourse finance. Such facilities may be made on an aggregated basis so that a variety of smaller projects create a portfolio of assets. Recourse for the financier to security is limited to the security based on that portfolio of assets with all assets being cross-collateralised. Alternatively, such facilities can be full recourse, meaning financiers may have recourse against all assets of the relevant companies within the corporate group of the Project Co.

Bonds

While debt-based bond funding is available for project finance, the Australian bond market:

• currently lacks longer tenor instruments to provide the long-term certainty that is often desired in the infrastructure project finance market; and
• is often considered too small to support the funding needs of Australia’s mega projects.

It is now becoming increasingly common for those seeking bond debt to access the US and Asian bond markets instead.

Investing

Australia's superannuation funds have been predominate investors and experts in Australia's infrastructure sector over the past two decades. It is common to see large fund managers or infrastructure investment teams partner with Australian superannuation funds to participate in the infrastructure market. These specialists often compete with overseas investors and entities such as Chinese state owned enterprises.

Common forms of investing in energy and infrastructure include:

• equity investment in special purpose vehicles or entities that may have a portfolio of interests (i.e. share capital); and
• secondary market investment in operational projects.

Standard form documentation may be used when entering into an energy or infrastructure transaction in Australia. Standard forms include:

• Australian Standards (Standards Australia);
• PC-1 1998 (Property Council of Australia);
• Australia Building Industry Contract (Master Builders' Association and Royal Australian Institute of Architects);
• FIDIC (international Federation of Consulting Engineers); and
• NEC3 (Institution of Civil Engineers)

It is important to note that these contracts are heavily amended and bespoke contracts are often used for alliances, PPPs or hybrid models.

The principal forms of private sector funding/investment in energy and infrastructure in Belgium (including in relation to public private partnerships) are:

Funding

Common forms of funding in energy and infrastructure include:

• loans made on a corporate finance basis (balance sheet debt);
• loans made on a project finance basis (to a special purpose project company) on medium to long term bases – such loans may later be syndicated to other funders.
• mezzanine debt (in some sectors);
• refinancing of the debt in operational projects; and
• asset financing.

Most commonly a small syndicate of national and/or international banks, and since recently, institutionalized investors (eg insurance companies), will be gathered to finance larger scale projects.

Funding is also, sometimes, provided by the European Investment Bank and export credit agencies.

Investing

Common forms of investing in energy and infrastructure include:

• 'equity' investment in special purpose vehicles or entities that may have a portfolio of interests, ie share capital and subordinated sponsor loans; and
• secondary market investment in operational projects (acquisition of 'equity').

Funding

The most common forms of funding in Brazilian Infrastructure and energy assets include:

• project-finance loans;
• corporate-finance loans; and
• infrastructure debentures.

The majority of the investments in Brazilian energy and infrastructure assets are provided by BNDES. Even in the projects developed under concessions and public-private partnerships, the presence of the state-owned bank is still high.

Investing

Private companies investments in energy and infrastructure assets are usually provided by means of equity.

Funding

Common forms of funding in energy and infrastructure include:

• loans made on a corporate-finance basis (balance sheet debt);
• loans made on a project-finance basis (to a special purpose project company) on medium to long-term bases – such loans may later be syndicated to other funders;
• bond finance;
• hybrid financing, particularly on long term projects where the initial design and construction activities or a portion thereof are paid for through one or more progress or milestone payments. In these cases, the deisgn and construction activities are financed by short-term construction facilities from commercial banks, whereas the long term debt is provided by way of bond financing, either underwritten or privately placed;
• mezzanine debt (in some sectors); and
• refinancing of the debt in operational projects.

Infrastructure financing

The financing of infrastructure will largely depend on the nature of the contract which is being let for the development of the relevant facility. Standard construction financing is available from commercial banks in the Canadian domestic market for design-build contracts for the construction of facilities. These are predominantly short-term facilities that are paid off through milestone or progress payments as the construction develops or through a substantial completion payment towards the end of construction.

If the procurement of the relevant facility involves operation, maintenance or rehabilitation of the facility throughout its useful life, then long-term financing is regularly utilized. Until 2008, European lenders regularly lent long-term debt into the Canadian market. Canadian commercial banks are reluctant to provide long-term tenors and so Canadian commercial bank debt is not available for long-term financing. However, with the shorter tenors being offered by European lenders after 2008, the Canadian capital markets have largely replaced long-term commercial bank debt. There are two primary forms of long-term financing used in infrastructure development. The first is the private placement of long-term debt, usually through bond or note facilities to long-term institutional investors such as life insurance companies. These debt instruments may be rated or unrated. The second predominant mode of financing for long-term debt is the broadly marketed underwritten bond, which is usually a rated product. Each of the main six Canadian banking institutions will provide underwriting for such a capital markets issuance. Bonds are usually sold down to long-term bondholders with life insurance companies again being major investors in this class of debt.

Investing

Common forms of investing in energy and other infrastructure include:

• 'equity' investment in special purpose vehicles or entities that may have a portfolio of interests, including share capital, limited partnership interests, and/or subordinated shareholder/unitholder loans; and
• secondary market investment in operational projects (acquisition of 'equity').

Unlike other markets (in particular the US), tax equity structures are not typically employed for electricity projects as Canada does not have the same focus on tax incentives as a means of promoting these projects. Similarly, tax-exempt banks are not a feature of debt financing in the Canadian market.

Funding

Through project finance and long-term agreements.

Investing

Through a special purpose vehicle that owns the project and is the holder of the permits involved in the same.

Funding

In Colombia, energy and infrastructure finance needs are met mainly by national or international commercial banks, nonbank finance companies (Corporaciones Financieras) and private equity funds that act together with multilateral agencies to serve as project lenders. Recently, insurance companies and private pension fund administrators have acted as financing sources for infrastructure projects.

Common forms of funding in energy and infrastructure include:

• syndicated bank loans made on a project-finance basis to a special purpose vehicle (SPV) project company, on medium- to long-term bases;
• private equity fund loans;
• project notes; and
• refinancing of the debt in the operation phase of the project.

Colombia’s government has tried to expand the funding base and increase liquidity in the market by various means. Recently, the Financiera de Desarrollo Nacional was created as a mixed-economy financial company that offers financing, guarantee and advisory services for energy and infrastructure projects.

Investing

Large engineering and construction companies act as sponsors in the development of infrastructure projects, while oil producers and energy agents are the companies that invest in the energy sector.

Common forms of investing in these sectors include:

• equity investment in project’s SPVs in the form of share capital or subordinated sponsor loans; and
• secondary market investment in operational projects (acquisition of 'equity’).

Funding

The common forms of funding in energy and infrastructure include:

• loans made on a corporate-finance basis;
• loans made on a project-finance basis;
• bond finance (this was used for example by the private rail operator Leo Express);
• mezzanine debt; and
• refinancing of the debt in operational projects.

The principal forms of private sector funding are:

Funding

Common forms of funding in energy and infrastructure include:

• loans made on a corporate finance basis (balance sheet debt);
• loans made on a project-finance basis;
• bond finance;
• mezzanine debt (in some sectors, generally not very common in Finland); and
• refinancing of the debt in operational projects.

Funding/funding products can also, sometimes, be provided by the European Investment Bank and export credit agencies.

Investing

Common forms of investing in energy and infrastructure include:

• 'equity' investment in special purpose vehicles or entities that may have a portfolio of interests, ie share capital and subordinated sponsor loans; and
• secondary market investment in operational projects (acquisition of 'equity').

The principal forms of private sector funding/investment in energy and infrastructure in France (including in relation to public-private partnerships) are:

Funding

Common forms of funding in energy and infrastructure include:

• loans made on a project-finance basis (to a special purpose project company) without any recourse against the shareholders of the special purpose vehicle (SPV) (these loans are generally a bridge loan for the construction and VAT, and at the commissioning, a refinancing loan in order to reduce the financing costs (as the asset has been delivered));
• projects bonds in the context of a refinancing;
• mezzanine debt provided by funds to the holding company of the SPV; and
• asset financing (which is particularly relevant in the rail, aviation and maritime sector).

The European Investment Bank is very active in telecom and infrastructure from a general point of view, while export credit agencies are more focused on assets (such as aircraft or ships).

Distressed funds may also acquire some debt participation through one of the mechanisms described in Loan transfers and portfolio sales.. In addition, French law has recently authorized certain kind of funds to lend directly to borrowers (professional private equity fund (FPCI), private equity funds (FPS and SLP), financing entities, which includes securitisation entities and specialised financing entities (OFS and SFS).

Investing

Common forms of investing in energy and infrastructure include:

• equity participation in the SPV, shares, convertible bonds etc; and
• shareholders loans (subordinated to the rights of the lenders in the context of a project financing).

It is specified that a private entity and a public entity may own some companies operating an asset in certain areas, called sociétés d'économie mixte.

As various regulatory restrictions exist, investing into the equity of an energy or infrastructure project may require in depth legal regulatory advice. Beyond these particularities, funding and investing in energy and infrastructure in Germany follows the European standard:

Funding

Common forms of funding in energy and infrastructure include:

• loans made on a corporate finance basis (balance sheet debt);
• loans made on a project-finance basis (to a special purpose project company) on medium- to long-term bases – such loans may later be syndicated to other funders;
• bond finance (less common in Germany than in the UK, but could become more popular in the future);
• mezzanine debt (rarely seen since the financial crisis, but in theory an alternative);
• refinancing of the debt in operational projects; and
• asset financing (this is particularly relevant in the rail sector).

Following the global financial crisis, the German government has tried to expand the funding base and increase liquidity in the market by increasing the KfW funding program for renewable energy projects with a German element to them.

Funding provided by the European Investment Bank and export credit agencies is also very popular in the German market.

Investing

Common forms of investing in energy and infrastructure include:

• 'equity' investment in special purpose vehicles or entities that may have a portfolio of interests, ie share capital and subordinated sponsor loans; and
• secondary market investment in operational projects (acquisition of 'equity').

Funding 

Common forms of funding in energy and infrastructure include:

• direct government budgetary expenditure;
• government borrowing from development finance institutions;
• government guarantees and commitments to concessionaires; and
• debt and equity raised on a project-finance basis.

There is a growing interest in pursuing infrastructure development through public-private partnership arrangements.

Funding

Common forms of funding in energy and infrastructure include:

• loans made on a corporate finance basis (balance sheet debt);
• loans made on a project-finance basis (to a special purpose project company) on medium- to long-term bases – such loans may later be syndicated to other funders);
• bond finance;
• refinancing of the debt in operational projects; and
• asset financing (particularly relevant in the rail sector).

Funding/funding products can also, sometimes, provided by the European Investment Bank and export credit agencies.

Investing

Common forms of investing in energy and infrastructure include:

• 'equity' investment in special purpose vehicles or entities that may have a portfolio of interests, ie share capital and subordinated sponsor loans; and
• secondary market investment in operational projects (acquisition of 'equity').

Funding

Sources of financing are mostly provided by leading foreign financial institutions and private investors but also by investment funds offering structured solutions for public projects established within a public-private partnership.

Many public infrastructure projects have been delivered by way of a public-private partnership, which is an arrangement between a public authority and a private partner under a long-term contract.

The funding structure has been used most often in the building of economic infrastructure such as roads.

Other common forms of funding in energy and infrastructure include:

• loans made on a corporate finance basis (balance sheet debt);
• loans made on a project-finance basis (to a special purpose project company) on medium- to long-term bases – such loans may later be syndicated to other funders;
• bond finance; and mezzanine debt.

Ireland’s location has provided it with an abundance of renewable energy potential, and this potential is being realized with the development of a highly active onshore wind energy industry. Ireland’s progress towards its renewable energy targets has proven attractive to foreign investors and there is significant investor demand for opportunities in this area.

Funding

The Italian energy industrial sector has been financed by various structures. Renewable energy sources have been historically financed through project financing and cash-flow based leasing agreements based on business plans reflecting the long-term life span of public subsidies. However, in the recent years the public subsidies for new energy plants have been reduced or, in certain cases, have not been renewed; the result is that the market, at least for the more technologically advanced sources such as photovoltaic, is now shifting to subsidy-free investments supported by long-term private power purchase agreements.

More recently, securitization has been used (including through synthetic transactions) to consolidate large debt portfolios both in the renewable energy sector (eg portfolios deriving from project financing transactions) and in the energy efficiency sector, where operator-owned portfolios of credit receivables and energy efficiency certificates are payable over the lifespan of the underlying agreements.

Bonds and minibonds are also commonly used in the sector.

A current market trend is the offer of mezzanine financing by financial entities or funds eager for high interest rate of return, particularly in the renewable energy sector. An operator may in fact demand mezzanine financing to release equity trapped in generation assets with stable returns and long maturity.

Also, the Italian infrastructure sector has been funded through project financing. In certain cases, traditional project financing has been subject to refinancing which has also contemplated a portion of bond financing.

Investing

The most commonly used forms of investments in the energy sector are funds and commercial companies (limited liability companies per shares, SPA, or simplified limited liability companies, SRL). There are significant differences between asset deals and share deals in terms of liabilities transferring to the purchaser, required consents by the authorities to the change of owner of the plant or the energy infrastructure and tax treatment of the transaction. Where possible, share deals are preferred in the energy generation sector, due to various legal and tax considerations.

In the infrastructure sector, investors mainly use special purpose vehicles in the form of commercial companies (either SPAs or SRLs) created specifically for the purposes of appropriate project management.

The principal forms of private sector funding/investment in energy and infrastructure in the Ivory Coast (including in relation to public-private partnerships) are:

Funding

Common forms of funding in energy and infrastructure include:

• loans made on a corporate finance basis (balance sheet debt);
• loans made on a project-finance basis (to a special purpose project company) on medium to long-term bases – such loans may later be syndicated to other funders;
• refinancing of the debt in operational projects; and
• asset financing – this is particularly relevant in the rail sector.

The principal forms of private sector funding/investment in energy and infrastructure in Japan are as follows.

Funding

Common forms of funding in energy and infrastructure include:

• senior debt – loans made on a corporate finance basis, loans made on a project finance basis to a special purpose company and bond finance; and
• mezzanine debt – mezzanine loans and mezzanine bond finance.

Each method of funding can be greenfield funding (funding at the outset of a project) or brownfield funding (refinancing or additional funding through the course of a project).

Investing

Common forms of investing in energy and infrastructure include:

• equity investments in ordinary shares;
• equity investment in preferred or subordinated shares; and
• other equity investments such as acquiring partnership interests.

Investments above are often made into a special purpose vehicle which subcontracts with other civil companies to build or operate the relevant infrastructure.

Each method of investment can be made by way of green field investment or brown field investment.

A listed infrastructure fund market which is similar to a listed real estate investment trust market was established in the Tokyo Stock Exchange in April 2015. Most listed infrastructure funds take the form of an investment corporation (toshi hojin).

Funding

Sources of financing are mostly provided by leading foreign financial institutions and private investors but also by investment funds offering structured solutions for public projects established within a public-private partnership.

Common forms of funding in energy and infrastructure include:

• loans made on a corporate finance basis (balance sheet debt);
• loans made on a project-finance basis (to a special purpose project company) on medium- to long-term bases – such loans may later be syndicated to other funders;
• bonds; and
• mezzanine debt.

Investing

Common forms of investing in energy and infrastructure include:

• equity investment in special purpose vehicles or entities that may have a portfolio of interests, such as share capital and subordinated sponsor loans; and
• secondary market investment in operational projects (acquisition of equity).

Funding 

Common forms of funding in energy and infrastructure include: 

• loans made on a corporate finance basis (balance sheet debt);
• loans made on a project-finance basis (to a special purpose project company) on medium to long-term basis;
• bond finance;
• loans from foreign institutions and countries;
• mezzanine debt (in some sectors);
• refinancing of the debt in operational projects; and
• asset financing (this is particularly relevant in the rail sector). 

Investing

Common forms of investing in energy and infrastructure include: 

• equity investment in special purpose vehicles or entities that may have a portfolio of interests;
• share capital and subordinated sponsor loans; and
• secondary market investment in operational projects (acquisition of equity).

The principal forms of private sector funding/investment in energy and infrastructure in Mexico (including in relation to Public-Private Partnerships) include the following.

Funding

• Loans made on a corporate finance basis (balance sheet debt)
• Loans made on a project-finance basis (to a special purpose project company) on medium- to long-term bases – such loans may later be syndicated to other funders
• Bond finance
• Fibra E public offering (equity)
• Mezzanine debt (in some sectors)
• Refinancing of the debt in operational projects

Mexico’s National Infrastructure Fund (Fondo Nacional de Infraestructura – FONADIN) has been a dynamic Mexican government tool to manage the development of national infrastructure in Mexico via public-private partnerships (PPPs), focusing on the highways, ports, airports, environment, urban mass transportation, water and tourism. FONADIN is one of the most important conduits for PPPs in Mexico by providing support – financing and know-how – for the planning, design, construction and final transfer of projects developed by the private sector. To be eligible for FONADIN support, projects must offer the country significant positive social impact and the prospect of major economic gain.

Investing

• 'Equity' investment in special purpose vehicles or entities that may have a portfolio of interests, ie share capital and subordinated sponsor loans
• Secondary market investment in operational projects (acquisition of 'equity')

The different forms of funding/investing in Morocco are mainly:

Loan

The bank loan deals with all types of projects. However, it is necessary to provide a minimum amount of equity capital and to bear a certain level of risk. To grant loans, banks often require the personal guarantee of the project owner, who must, for example, accept a mortgage on his home or the pledge of his movable property.

Investment capital

This type of investment can be made at different stages of the company's development cycle. In most cases, investment funds are specialized according to the development phase in which they operate:

• Venture capital or seed capital for investments in start-ups;
• Growth capital for investments in developing companies, with at least 3 to 5 years of activity. The equity investment generally takes the form of a capital increase and is intended to help the company financing ambitious growth projects;
• Transmission capital for investments in mature companies with stable growth, and corresponds to the sale of shareholders (usually creators) of their shares in the company.

Funding

The most common forms of funding both energy and infrastructure projects is by means of a combination of debt and equity structures. The debt structures can vary but most commonly are senior only structures. Repayment profiles are, as is the case with energy and infrastructure projects internationally, adopted to have regard to the cash flow ability of the investment concerned.

Investing

The most common forms of funding both energy and infrastructure projects is by means of a combination of debt and equity structures. The debt structures can vary but most commonly are senior only structures. Repayment profiles are, as is the case with energy and infrastructure projects internationally, adopted to have regard to the cash flow ability of the investment concerned.

The principal forms of sector funding in energy and infrastructure in New Zealand are:

• loans made on a corporate finance basis (balance sheet debt);
• loans made on a project-finance basis (to a special purpose project company) on medium- to long-term bases. Such loans may later be syndicated to other funders;
• bond finance;
• mezzanine debt (in some sectors);
• refinancing of the debt in operational projects; and
• asset financing.

Funding is often sourced from offshore.

The most common form of investment in energy and infrastructure is equity investment in joint ventures, special purpose vehicles or entities that may have a portfolio of interests (share capital and subordinated sponsor loans).

Funding

The most common forms of funding for energy and infrastructure include balance sheet lending and project finance (including PPP).

Investing

The most common forms of investing in energy and infrastructure include direct equity investments.

The principal forms of private sector funding/investment in energy and infrastructure in Peru (including in relation to public-private partnerships) include the following.

Funding

• Loans made on a corporate finance basis (balance sheet debt)
• Loans made on a project-finance basis (to a special purpose project company) on medium- to long-term bases – such loans may later be syndicated to other funders (for publicly procured project finance deals, this often means using private finance)
• Bond finance
• Mezzanine debt (in some sectors)
• Refinancing of the debt in operational projects
• Asset financing (this is particularly relevant in the rail sector

In order to promote private investment in these activities, the Peruvian government has tried to expand the funding base and increase liquidity in the market (particularly by encouraging institutional investors) by various means. These include the Ministry of Economy and Finance of Peru offering financial and non-financial guarantees to assure certain types of debt on infrastructure projects (for example, guaranteeing bond finance debt so as to lower debt pricing to near gilt levels and offering a ‘minimum guaranteed income’).

Investing

• 'Equity' investment in special purpose vehicles or entities that may have a portfolio of interests, ie share capital and subordinated sponsor loans
• Secondary market investment in operational projects (acquisition of 'equity')

The principal forms of private sector funding/investment in energy and infrastructure in Poland (including in relation to public-private partnerships) are as follows.

Funding

Common forms of funding in energy and infrastructure include:

• loans made on a corporate finance basis (balance sheet debt);
• loans made on a project-finance basis (to a special purpose project company) on medium- to long-term bases – such loans may later be syndicated to other funders;
• bond finance;
• mezzanine debt (in some sectors);
• refinancing of the debt in operational projects; and
• asset financing (this is particular relevant in the rail sector).

Funding/funding products can also, sometimes, be provided by the European Investment Bank and export credit agencies.

Investing

Common forms of investing in energy and infrastructure include:

• 'equity' investment in special purpose vehicles or entities that may have a portfolio of interests, ie share capital and subordinated sponsor loans; and
• secondary market investment in operational projects (acquisition of 'equity').

Funding

Common forms of funding in energy and infrastructure include:

• loans made on a corporate-finance basis;
• loans made on a project-finance basis (to a special purpose project company) on medium- to long-term bases – such loans may later be syndicated to other funders;
• bond finance;
• mezzanine debt (in some sectors);
• refinancing of the debt in operational projects; and
• asset financing (this is particularly relevant in the railway sector).

Investing

Common forms of investing in energy and infrastructure include:

• 'equity' investment in special purpose vehicles or entities that may have a portfolio of interests, ie share capital and subordinated sponsor loans; and
• secondary market investment in operational projects (acquisition of 'equity').

Funding

In the past the principal source of funding for energy and infrastructure projects was through the issuance of municipal bonds by instrumentalities of the Commonwealth of Puerto Rico such as the Puerto Rico Electric Power Authority. Given the financial challenges of the government sector in Puerto Rico and the lack of access to the world capital markets, the shift has been to financing projects through public-private partnerships (P3s) (brownfields and greenfields).

Investing

Since the government is relying almost exclusively on P3s, there are investment opportunities for infrastructure funds and similar investors and lenders to such investors.

The principal forms of private sector funding/investment in energy and infrastructure in Romania (including in relation to public-private partnerships) are:

Funding

Common forms of funding in energy and infrastructure include:

• loans made on a corporate-finance basis (balance sheet debt); and
• loans made on a project-finance basis.

Funding/funding products can also, sometimes, be provided by the European Bank for Reconstruction and Development.

Investing

Common form of investing in energy and infrastructure is 'equity' investment in special purpose vehicles or entities that may have a portfolio of interests, ie share capital and subordinated sponsor loans.

Funding

Common forms of funding in energy and infrastructure include:

• loans made on a corporate finance basis;
• loans made on a project-finance basis (to a special purpose project company);
• bond finance;
• refinancing of debt; and
• asset financing (which is less common).

Investing

Common forms of investing in energy and infrastructure include:

• 'equity' investment in special purpose vehicles or entities that may have a portfolio of interests; and
• secondary market investment in operational projects (acquisition of 'equity'). 

The principal forms of private sector funding/investment in energy and infrastructure in Senegal (including in relation to public-private partnerships) are:

Funding

Common forms of funding in energy and infrastructure include:

• loans made on a corporate finance basis (balance sheet debt);
• loans made on a project-finance basis (to a special purpose project company) on medium to long-term bases – such loans may later be syndicated to other funders;
• refinancing of the debt in operational projects; and
• asset financing: this is particularly relevant in the rail sector.

The principal forms of private sector funding/investment in energy and infrastructure in Singapore (including in relation to public-private partnerships) are as follows.

Funding

Common forms of funding in energy and infrastructure include:

• public financing where the government uses funds from either tax revenue or public sector borrowing such as bonds;
• loans made on a corporate-finance basis (balance sheet debt);
• loans made on a project-finance basis (to a special purpose project company) on medium- to long-term bases – such loans may later be syndicated to other funders;
• bond finance;
• mezzanine debt (in some sectors);
• refinancing of the debt in operational projects; and
• asset financing.

Investing

Common forms of investing in energy and infrastructure include:

• 'equity' investment in special purpose vehicles or entities that may have a portfolio of interests, ie share capital and subordinated sponsor loans; and
• secondary market investment in operational projects (acquisition of 'equity').

Funding

The most common form of private sector funding in energy and infrastructure in Slovakia (including in relation to public-private partnerships) are loans made on a project-finance basis and provided by financial institutions on medium- to long-term bases, or provision of own resources by the private sector partner.

Funding/funding products can also be, sometimes, provided by the European Investment Bank or European Bank for Reconstruction and Development.

Investing

The most common form of investing in energy and infrastructure includes 'equity' investment in a special purpose project company (either a green field company or a functioning project) or in entities that may have a portfolio of interests.

Funding

Common forms of funding in energy and infrastructure are:

• debt funding (senior, junior and mezzanine) – both on a balance sheet basis and project finance basis; and
• preference share funding – this has been prominent in the renewable energy sector where the initial participants, particularly the black economic empowerment partners, were initially funded through development funding institutions (such as the Development Bank of Southern Africa and the Industrial Development Corporation) and, now that the projects are operational, are refinancing the development funding through the issue of preference shares (which entitle the holder to set dividends ahead of ordinary shareholders and to take over the issuer in the event of a default) to some of the investment banks, which results in a lower cost of funding for those investors.

Investing

The most common form of investing is through the acquisition of equity shares or concessions.

The principal forms of private sector funding/investment in energy and infrastructure in Spain (including in relation to public-private partnerships) are as follows.

Funding

Common forms of funding in energy and infrastructure include:

• loans made on a corporate finance basis (balance sheet debt);
• loans made on a project-finance basis (to a special purpose project company) on medium to long-term bases – such loans may later be syndicated to other funders;
• bond finance; and
• asset financing (this is particularly relevant in the aviation and naval sectors).

Funding/funding products can also, sometimes, provided by the European Investment Bank and export credit agencies.

Investing

Common forms of investing in energy and infrastructure include:

• 'equity' investment in special purpose vehicles or entities that may have a portfolio of interests, i.e., share capital and subordinated sponsor loans; and
• secondary market investment in operational projects (acquisition of 'equity').

The principal forms of private sector funding/investment in energy and infrastructure in Sweden (including in relation to public-private partnerships) are as follows.

Funding

Common forms of funding in energy and infrastructure include:

• loans made on a corporate finance basis (balance sheet debt);
• loans made on a project-finance basis (to a special purpose project company) on a medium to long-term basis; such loans may later be syndicated to other funders; this is predominately a source of financing of certain energy assets;
• bond finance;
• refinancing of the debt in operational projects; and
• asset financing which is particularly relevant in the rail sector.

Funding/funding products can also sometimes be provided by the European Investment Bank and export credit agencies.

Investing

Common forms of investing in energy and infrastructure include:

• 'equity' investment in special purpose vehicles or entities that may have a portfolio of interests, ie share capital and subordinated sponsor loans; and
• secondary market investment in operational projects (acquisition of 'equity').

The principal forms of private sector funding/investment in energy and infrastructure in Thailand are:

Funding

Common forms of funding in energy and infrastructure include:

• loans made on a corporate-finance basis (balance sheet debt);
• loans made on a project-finance basis;
• bond finance;
• mezzanine debt (in some sectors);
• refinancing of the debt in operational projects; and
• asset financing.

Investing

Common forms of investing in energy and infrastructure include:

• Infrastructure fund which must be listed on the SET to raise capital from both individual investors and institutional investors in order to finance infrastructure projects across Thailand. Infrastructure fund is allowed to invest in infrastructure projects, for example, railway, road / expressway / toll-way / concession way, alternative energy, natural disaster prevention system, waterworks, airport / airfield, telecommunications system and irrigation system / water management system.telecommunications system and irrigation system / water management system.
• Infrastructure trust which must be listed to raise funds from the public. The trust can invest in infrastructure assets of greenfield and / or brownfield projects. Infrastructure trust is allowed to invest in infrastructure projects that provide benefits to the public either in Thailand or overseas, for example, railroad, electrical power generating system, waterworks, road or expressway or concession way, airport, deep sea port, telecommunications system, alternative energy, irrigation system, natural disaster prevention system, pipeline transportation system and multi-infrastructure project with joint benefits to the community or interconnected communities.

The principal forms of private sector funding/investment in energy and infrastructure in Ukraine (including in relation to public-private partnerships) are as follows.

Funding

Common forms of funding in energy and infrastructure include:

• loans made on a corporate finance basis (balance sheet debt);
• loans made on a project-finance basis (to a special purpose project company) on medium to long-term basis – such loans may be made by international financial institutions (such as the European Bank for Reconstruction and Development, the World Bank and the International Finance Corporation);
• loans made by export credit agencies; and
• asset financing (particularly relevant in the rail sector).

Investing

Common forms of investing in energy and infrastructure include:

• 'equity' investment through special purpose vehicles and subordinated sponsor loans; and
• secondary market investment in operational projects (acquisition of 'equity').

The principal forms of private sector funding/investment in energy and infrastructure in the UK (including in relation to public-private partnerships) are:

Funding

Common forms of funding in energy and infrastructure include:

• loans made on a corporate finance basis (balance sheet debt);
• loans made on a project-finance basis (to a special purpose project company) on medium to long-term bases – such loans may later be syndicated to other funders. For publicly procured project financed deals, this has traditionally meant using the PF2 or Private Finance Initiative (PFI) model since the UK government announced that such models can no longer be used, the market had adapted to provide financing on private sector-initiated energy and infrastructure projects;
• syndicated to other funders. (For publicly procured project financed deals, this often means using the PF2 model which is a successor to the Private Finance Initiative (PFI));
• bond finance;
• mezzanine debt (in some sectors);
• refinancing of the debt in operational projects; and
• asset financing this is particular relevant in the rail sector.

Funding/funding products can also, sometimes, be provided by the European Investment Bank and export credit agencies.

Investing

Common forms of investing in energy and infrastructure include:

• 'equity' investment in special purpose vehicles or entities that may have a portfolio of interests, ie share capital and subordinated sponsor loans; and
• secondary market investment in operational projects (acquisition of 'equity').

The principal forms of private sector funding/investment in energy and infrastructure in the UK (including in relation to public-private partnerships) are as follows.

Funding

Common forms of funding in energy and infrastructure include:

• loans made on a corporate finance basis (balance sheet debt);
• loans made on a project-finance basis (to a special purpose project company) on medium to long-term bases – such loans may later be syndicated to other funders. (For publicly procured project financed deals in Scotland, this often means using the NPD model which is a successor to the Private Finance Initiative (PFI));
• bond finance;
• mezzanine debt (in some sectors);
• refinancing of the debt in operational projects; and
• asset financing; this is particularly relevant in the rail sector.

Following the global financial crisis, the UK government has tried to expand the funding base and increase liquidity in the market (particularly encouraging institutional investors) by various means. These include HM Treasury/Infrastructure UK offering the UK Guarantee Scheme to guarantee certain types of debt on an infrastructure projects (for example, guaranteeing bond finance debt (similar to the role monolines used to play on such deals) so as to lower debt pricing to near gilt levels) and the Green Investment Bank lending on energy projects (although the latter is in the process of being privatized).

Funding/funding products can also, sometimes, provided by the European Investment Bank and export credit agencies.

Investing

Common forms of investing in energy and infrastructure include:

• 'equity' investment in special purpose vehicles or entities that may have a portfolio of interests, ie share capital and subordinated sponsor loans; and
• secondary market investment in operational projects (acquisition of 'equity').

In the UAE, the principal forms of private sector funding/investment in energy and infrastructure are:

• loans made on a corporate finance basis (balance sheet debt, which may include Shari'a compliant financing);
• loans made on a project-finance basis (to a special purpose project company domiciled either in a UAE free zone or in a traditional offshore jurisdiction such as the Cayman Islands or British Virgin Islands) on medium- to long-term bases – such loans may later be syndicated to other funders;
• bond finance; and
• refinancing of the debt in operational projects.

Funding

Financing infrastructure projects in the US can involve different forms of financing:

• traditional loans at the corporate level based on the balance sheet of the parent or holding company;
• project financing which involves loans to or bonds issued by the applicable project company secured by the project assets and equity in the project company – these may include construction and term loans, working capital loans, letter of credit facilities and asset-based securitizations, and the financing may involve a simple project or a portfolio of projects;
• tax equity investments which involve the acquisition by the financing party of an equity interest in order to take advantage of certain tax benefits, such as the production tax credit and the investment tax credit – as above, these financings are used to fund a single project or a portfolio of projects;
• sponsor loans or mezzanine debt;
• municipal bonds (used by state and local governments for public projects) which are typically exempt from federal, state and local taxes – bonds may be supported by fee-based revenues such as those generated by a toll road; and
• federal and state grants, loans or incentives used to fund public and private infrastructure assets – these programs vary by location and asset class (e.g. the federal government has established the Drinking Water State Revolving Fund and the Clean Water State Revolving Fund which offer low-interest loans to local authorities for water supply and wastewater facilities).

Investing

Direct investment in infrastructure often involves the purchase of an equity interest in applicable holding or project companies. In the US, active sponsors and developers often play multiple roles in transactions and an affiliate will act as the contractor, equipment supplier or operator in connection with such an investment. A number of energy companies have created joint ventures to facilitate such transactions. 

As noted above, infrastructure projects may also be structured as public-private partnerships.