The Arrangements Of Debt Financing In The Development Of Public Utilities

In accordance with the rapid development of China's public utilities, the traditional financing system has become a critical obstacle to their sound and high-speed development. Fettered by traditional system and ideas, many listed companies in the line of public utilities always utilize equity financing as their main finance source but attach little importance to debt financing. Therefore, how to improve the structure of capital, lower the costs of capital, and attain maximum benefits is an important issue for utility industry to solve.A proper scale of debt financing for utility industry is put forward in the paper by introducing domestic and foreign experience and making a comparative and analytic study on various debt financing vehicles. Moreover, debt financing arrangements which is appropriate for utility companies' operation and making profits are concluded as follows: enlarging debt financing scale and regarding debt financing as a main finance source for the utility construction; actively utilizing loans of international financial organizations and foreign countries as well as domestic preferential loans; making use of entrusted loans and credit investment in a flexible way; gradually lowering the dependence on commercial loans to avoid potential risks. Finally, some suggestions aregiven in the aspect of opening more ways on debt financing.