Study On The Mode And Risk Control Of Commercial Banks Participating In PPP Projects

With the accelerating urbanization in China,there's the increasing demand for public infrastructure construction and service efficiency while the traditional mode of government investment and financing has difficulties in meeting demand of national development.In this context,it was proposed in the third Plenary Session of the 18 th CPC Central Committee to “allow social capital to participate in the investment and operation of urban infrastructure through franchising” so as to improve the healthy development of urbanization system mechanism.PPP reform,serving as an important tool for the structural supply-front reform in the field of public service,demonstrated high vitality in innovation of mechanism and system,and exercised strong traction force in general aspects thus gained great government support.Financing is the key to success of PPP projects.As the biggest provider for social funding,commercial banks to participate in PPP projects is driven by the trend and also the prospect of development opportunities.However,since China is still exploring in PPP mode,the mode and risk control system of commercial banks' participation in the PPP project are yet to be established,so it is of great significance in practical terms to study on the mode of commercial banks to participate in the PPP project and how to control the risk.Based on the status quo of research made at home and abroad,this paper first summarizes the concept of PPP mode and PPP development in China.Secondly,by incorporating the current situation of PPP development in China,analysis are made on the motives for commercial banks to participate in PPP project,and opportunities and challenges possibly to be encountered in the participation.The main body of the paper classifies the mode of commercial banks participating in PPP projects into three types according to the form of financing mode,namely debt financing,equity financing and asset securitization,and examines the specific business operations of commercial banks under each model.Furthermore,there's also the study on each financing mode regarding potential risks and risk control measures which could be taken by commercial banks,followed by analysis of particular cases for each model.