Chengdu Tap Liu Chang Plant B Bot Financing Mode

Infrastructure construction plays an important role in national economy, but it has the characteristics of large investment, long term construction period and high risk, based on the limit of national or local government's finance, it cannot meet the requirement of the sole investment directly by the government. To meet the global marketing and our domestic economy reformation, the government would like to replace the status from direct investment by marketing oriented investment channels through the financing reformation step by step. In the past it did great affection by direct foreign capital investment, or loan and bond from international finance organization and foreign governments, on the other side, our national loan also increased a lot, the risks of interest rate and exchange rate became higher. People never stop looking for the new ways for financing to decrease finance or loans, so that BOT (for short of Build-Operate-Transfer) becomes one of the major methods for attracting capital on the developing of infrastructure construction.Under such circumstance, the BOT project of Chengdu No. 6 Water Plant B (hereafter called as"Chengdu Waterworks BOT Project") got formal approval in 1997 and becomes the first BOT pilot project nominated by National Planning Committee. The total investment is 106.5 million USD with the method by project financing. Among all the investments, 70% are all financed by Asian Development Bank and European Investment Bank, while the other 30% comes from 2 shareholders– French Veolia (changed name from Vivendi in 2003 and hereafter called"Vivendi"as"Veolia"even before the name change) holds 60% and Japanese Marubeni holds 40%. Chengdu BOT Project started building in August 1999, and run operation successfully in February 2002, average capacity is 400,000 tons per day. It marks the success of our nation's first BOT project on water supplying infrastructure. The plant will be transferred to Chengdu government in August 2017.Taking Chengdu Waterworks BOT Project as sample, this article centers on the theory, method, development, basic structure, operation process and risks avoiding of...