Optimize The Capital Structure Of The Project Financing

With the development of global economy, great progress in economy have taken place in numerous developing countries. The progress of urbanization becomes faster and faster. Large quantities of people pour into cities and the construction of cities' infrastructure needs lots of capital. According to the date of financing loan from Asia Development Bank, total account of infrastructure construction in Asian countries has gotten several trillions. Among them, China takes 6 000 hundred million dollars, South Korea takes 4 000 hundred million dollars. Indonesia takes 2500 hundred million dollars. Philippines takes 165 hundred million dollars. Half of the money is used for transportation construction, next is used for generating electricity and communication. In World Bank annual meeting in 1997, the official for World Bank think 20000 hundred million dollars for developing infrastructure construction are needed in Asian zone in ten years. Government finance can't meet for the capital requirement. Till 2002, our country's individual saving account has exceeded 70000 hundred million RMB. If we use this money in the infrastructure construction, it has great significance to mitigate the lack of money. Project financing is a good way to introduce folk and foreign capital to our country's infrastructure construction. But it is difficult to decide the project company because of absence of research about project company financing.So, this paper analyses the capital construction of project company financing in order to enhance value and manage risk of the project company perfectly.Firstly, the paper analyses the capital construction of project company financing in order to enhance the project company value perfectly. Because of absence of information about project company value, the paper analyses the relation between company value and its capital construction in market at first, then uses the resolution to resolves the optimization problem about capital construction of project company financing.Secondly, the paper analyses the capital construction of project company financing in order to manage the risk of the project perfectly, and finds the capital construction of the project company when the whole risk of the project is minimal.Finally, the paper integrates the two research achievements and finds the optimal capital construction of the project company when we build a fired-power project by using project company financing model, then analyses case to verify the truth of the resolution.