PPP (public-private-partnership) mode refers to the partnership between the government and private organizations based on the franchise agreement in order to provide some public goods and services. By signing a contract, the rights and obligations of both parties are clarified, so as to ensure the smooth completion of the cooperation, and finally the cooperative parties can achieve more favorable results than expected through individual actions.

Judging from the understanding of PPP by countries and international organizations, PPP can be divided into broad sense and narrow sense.

In a broad sense, PPP refers to various cooperative relationships established between the public sector and the private sector to provide public products or services. Generalized PPP can be understood as a general term for a series of project financing modes, including BOT, TOT, DBFO and other modes. Narrow PPP emphasizes the risk sharing mechanism and the principle of value for money in the process of cooperation.

Extended data

Compared with equity funds, quasi-equity funds have the following characteristics:

First, in PPP financing arrangements, there are usually strict restrictions on the dividend distribution of the project company, but in this respect, the restrictions on quasi-equity, especially the restrictions on debt interest payment, can be reduced through negotiation.

Second, the quasi-equity fund provides investors with greater flexibility in designing the legal structure of the project: first, as a debt, interest payment can be tax-free; Secondly, quasi-equity capital can be repaid regardless of the tax structure of the project, and the repayment of equity capital will be restricted by the investment structure and tax structure of the project, and its legal procedures are very complicated.

References:

Baidu Encyclopedia: PPP Mode