2.1 PPP Structure

A typical PPP structure can be quite complex involving contractual arrangements between a number of parties including the government, project sponsor, project operator, financiers, suppliers, contractors, engineers, third parties (such as an escrow agent), and customers. The next figure shows a simplified PPP structure. However, the actual structure of a PPP depends on the type of partnerships.


Figure 2: Typical structure of a PPP project. 

Note: The box on the right side labelled "expert" represents various participating groups in a PPP project including engineers (designer), contractor (builder), operator and insurer.

Similarly, the box on the left side labelled "financiers" includes various parties investing in a project comprising equity and debt financiers which may include domestic and foreign banks and financial institutions, bi-lateral and multi-lateral donor agencies, development banks, and similar other agencies.

The box labelled "escrow agent" represents normally a financial institution that is appointed by the project company and the lenders for managing an account called escrow account. The escrow account is set up to hold funds (including project revenues) accrued to the project company. The funds in the account are disbursed by the escrow agent to various parties in accordance with the conditions of the agreements. An escrow account is also used to hold a deposit in trust until certain specified conditions are met.

 

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Copyright © 2008 by Transport Policy and Development Section, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).