Research On PPP Investment And Financing Model Of Environmental Protection Projects

In recent years, environmental problems have become increasingly serious and the heavily contaminated environment has become the social focus. "The Twelfth Five-Year Plan of Economic and Social Development" points out that we should set up resource-saving and environment-friendly production and consumption patterns, and enhance capacity for sustainable development. This development goal reflects the commitment of our government to increase investment in environmental protection. However, the government funding is not enough to meet the huge funding gap of environmental protection projects. Therefore, it is very necessary to do the research of the investment and financing issues of environmental protection projects to explore the suitable investment and financing model which will provide financial support for environmental protection projects. Besides that, it is also significant to promote the coordinated development of economic development and environmental protection.First of all, the thesis reviews the development history of environmental protection industry in China. Combined with the development characteristics of China's environmental protection industry, the paper also analyzes the current situation of investment and financing of environmental projects and sums up the problems that China's environmental protection projects facing, such as the total lack of investment, single investors, single investment and financing channels and low capital efficiency. Combined with the reform goal of investment and financing system in environmental protection projects, the paper analyzes several investment and financing models, such as the bank loans, bond financing, environmental funds, green credit and PPP model. Compared with others, PPP model has an important role in expanding the sources of funds, risk diversification and improve the capital efficiency.Secondly, the thesis analyzes the connotation, operational processes and the key factors for successful operation of PPP model. The utility function model shows that the private sector behaviors are closely related to the regulatory actions of the government. Besides that, the paper analyzes the government regulation from three aspects, the entry and exit regulation, the price regulation and the quality of service regulation. Focus on the price regulation, the paper analyzes the factors that the pricing mechanism of PPP mode should consider. Based on this, the paper set up a pricing mechanism based on cost and quality of service. And the empirical analysis of the sewage treatment plant in Tianjin verifies that the model is feasible in the practice.Finally, the thesis proposes several suggestions for the implementation of PPP model in China's environmental protection projects, including improving the legal system of the PPP model, providing a legal basis for the implementation of PPP model; setting up favorable policy environment, such as taxation favorable policy, streamlining government approval program and the upgrading of government credit and so on; setting up the regulatory system to ensure the smooth operation of PPP model in environmental protection projects.