Research On Financing Risk For Commercial Banks In PPP Projects And Solution Options

PPP(Public Private Partnership),as a new public-private partnership model,is applied to infrastructure projects.The model solves the contradiction in traditional infrastructure construction,eases the financial pressure on the public sector,copes with long-cycle project,improves project management efficiency,effectively deals with project risks,enables public and private sectors to obtain Pareto improvement and satisfies the social demand for infrastructure.PPP model has numerous advantages and is a new way to provide public goods.However,in China,PPP model is still at an early stage of exploration,and the risks facing projects can not be ignored.Risk control and response is an important safeguard to achieve fixed objectives.Objective identification,evaluation and response are needed for projects to reinforce the risk management level of infrastructure projects.This paper first introduces the research background,has an overview of domestic literatures on PPP model research and proposes the status of inadequate researches on the relationship between China's PPP model and commercial banks.Secondly,it puts forward the basic concept and theoretical basis of PPP and explains the particularity of PPP model.A theoretical foundation is laid from three aspects,namely the theory on public goods,market failure theory and principal-agent theory.Thirdly,the risk factors for commercial banks to participate in PPP projects are highlighted,including project-specific risks,cycle risks,government credit risks,bank's internal risks and policy and legal risks.On this basis,the paper discusses the ways for commercial banks to participate in PPP mode.From bank credit point of view,from the aspect of the risk generated from commercial banks'participation in PPP project financing,it explores the feasibility of a variety of financing instruments such as investment model,bank loan model and asset securitization model in project risk response,broadens the present research areas and brings new perspectives on PPP project financing risk.Finally,it summarizes the research process,states the findings and discusses the feasibility of syndicated loans in PPP projects with a view to provide new ideas for domestic infrastructure PPP projects.