(d) if the government and or its utility is purchasing the output of the facility to be
procured, the terms and conditions should be clearly specified in a Sales
Agreement.
(e) it is the government’s role to be normally responsible for the provision of all
guarantees to the project, whether of a financial or other nature.
(f) when the government and/or its agency is purchasing the project’s output,
guarantees as regards purchase prices and quantities should be given to ensure
projected revenues to the project to enable debt service, equity re-payments and
other financial commitments.
(g) the government should insist on some form of long-term financial commitment
from the sponsors of the project (usual1y through the Concession Agreement)
throughout the whole operating period.
18.6.3 Role of Multilaterals
Multilaterals which have to date shown interests in BOT projects are among others:
• The World Bank
• The Asian Development Bank
• The African Development Bank
• The Inter-American Development Bank.
The role of a multilateral, as regards its involvement in a BOT project is to create
and enhance the environment for the commercial banks to become interested in a
particular project.
The World Bank, through its branch named International Bank for Reconstruction and Development (IBRD) has to date been involved essentially in the conventional lending to Government against guarantees, or to government owned utilities
backed by the government as a guarantor.
The World Bank has also created another branch, named the International
Finance Corporation (IFC) which has been involved essentially in provision of
debt and equity to projects without direct government guarantees.
The IFC can participate in a project in any of the following ways:(i) Equity investment
(ii) Provide debt participation
(iii) Guarantee commercial bank loans
(iv) Carry out feasibility studies
(v) Provide advice to host government as regards implementation of BOT projects,
their advantages and disadvantages, and the kinds of government support
needed to make the project a success.
(vi) Provide lists of prospective advisors on the above issues to government, who
would assist the latter in the selection process of, and negotiations with, the
potential sponsors.
510
18 Infrastructure Markets and the Private Sector
procured, the terms and conditions should be clearly specified in a Sales
Agreement.
(e) it is the government’s role to be normally responsible for the provision of all
guarantees to the project, whether of a financial or other nature.
(f) when the government and/or its agency is purchasing the project’s output,
guarantees as regards purchase prices and quantities should be given to ensure
projected revenues to the project to enable debt service, equity re-payments and
other financial commitments.
(g) the government should insist on some form of long-term financial commitment
from the sponsors of the project (usual1y through the Concession Agreement)
throughout the whole operating period.
18.6.3 Role of Multilaterals
Multilaterals which have to date shown interests in BOT projects are among others:
• The World Bank
• The Asian Development Bank
• The African Development Bank
• The Inter-American Development Bank.
The role of a multilateral, as regards its involvement in a BOT project is to create
and enhance the environment for the commercial banks to become interested in a
particular project.
The World Bank, through its branch named International Bank for Reconstruction and Development (IBRD) has to date been involved essentially in the conventional lending to Government against guarantees, or to government owned utilities
backed by the government as a guarantor.
The World Bank has also created another branch, named the International
Finance Corporation (IFC) which has been involved essentially in provision of
debt and equity to projects without direct government guarantees.
The IFC can participate in a project in any of the following ways:(i) Equity investment
(ii) Provide debt participation
(iii) Guarantee commercial bank loans
(iv) Carry out feasibility studies
(v) Provide advice to host government as regards implementation of BOT projects,
their advantages and disadvantages, and the kinds of government support
needed to make the project a success.
(vi) Provide lists of prospective advisors on the above issues to government, who
would assist the latter in the selection process of, and negotiations with, the
potential sponsors.
510
18 Infrastructure Markets and the Private Sector