Study Of Develop Finance Supporting Private Capital Investing Into The Infrastructure Project

Infrastructure is the foundation of the growth of economic and society, the totalinvestment each year must be3%-5%of GDP to ensure it can keep up with the pace ofeconomic and social development. For a long time, China mainly depends on thegovernment to support the infrastructure investment. In recent years, the proportion offinancial funds invest into infrastructure sphere declines year by year, thus makes thefinancial funds budget could no longer fulfill the demand of infrastructure investment. Atthe same time, China’s private capital has made considerable progress thanks to manyyears’ development, which contributes to over60percentage of China’s GDP, thus makesprivate capital plays a more and more important role in China’s economy. However, underthe current environment, the proportion of private capital participating in infrastructureconstruction is much lower than needed for kinds of obstacles. So it is of great practicalsignificance to find the right way to conduct private capital investing into infrastructuresphere, which is sure to solve the shortage of funds and inefficient which we facecurrently.The issue of related economic policies at recent years creates the conditions forprivate capital to invest into infrastructure sphere, the main problem now is to find theright entrance and exit mechanisms. At this paper, literature reading method, case studiesand comparative analysis is used. Based on the analysis of the shortcomings of thetraditional BOT mode and government investment and financing platform, a newinvestment and financing mode, DF-BOT mode is proposed, which combines the functionand superiority of development finance and can promote private capital participating intoinfrastructure construction. In this mode, development finance institution plays multipleroles as investor, guarantor and manager and participates into different stages of projectplanning, development, construction, operation, transfer, etc. The unique financingstructure and credit structure of DF-BOT mode can provide good entrance, exit andincentive mechanism for private capital participating into infrastructure construction.