A Study On The Financing Motivation And Effectiveness Of Environmental Infrastructure Public REITs

The establishment of basic facilities as an important support for the development of economy requires a great deal of funds.Because the Five-year Plan of14 th Five-Year Plan has taken eco-civilization as the focal point in the future,its strategy target has been transformed.Over the past few years,the majority of environment infrastructure companies depend on PPP funding,but the PPP for environment conservation has been very sluggish.The IPO of REITs has been officially started in 2021,and related government authorities have released related policy papers to promote the integration of certain environmental programs into the REITs.REITs is a kind of new way of financing,it can complement the conventional way of financing and offer high efficiency to the corporation in particular market.It is hoped that this article can offer a new way to raise funds for environment conservation and asset intensive companies,offer examples for further developing REITs in China,advance the use of REITs in the environment sector,and contribute to the high-quality development of industry financial sector in China,and realize the target of environment protection in China.In this article,the only environmental infrastructure REIT among the first nine publicly traded REITs,the Fortune Capital Water Closed-End REIT,is selected as a case study.Firstly,we review the domestic and international literature on infrastructure financing,the current state of research on REITs financing models,and the motivation and effects of REITs financing,and on this basis,we introduce in detail the theoretical basis and relevant concepts related to REITs.Secondly,the development history of REITs in China and the 19 public REITs in the current market are reviewed and analysed.Once again,the closed-ended REITs of Fortune Capital Water are selected as case studies to introduce the product profile,transaction structure and operation of the underlying assets,analyse the financing motives from the policy background,industry development and the enterprises’ own needs,and evaluate the financing effect from the financial and non-financial perspectives.The study shows that there are various factors contributing to the success of REITs,including the endogenous motivation of high-quality underlying assets,the promotion of national policies as a basic guarantee for the success of the issue,the significant impact of the financing behaviour of enterprises through public REITs issuance,which can effectively improve the financial situation of enterprises and bring positive impact to the enterprise’s stock price,which can effectively enhance its cumulative earnings in the short term and in Countermeasures and suggestions are put forward in response to the above research in conjunction with the development status of public REITs in China.