Policy solution and game analysis for addressing the challenge of developing public–private partnership energy project

Abstract

Various developing countries have been promoting public-private partnership (PPP) infrastructure projects in recent years. Energy infrastructure project construction, which needs substantial capital investments, is a cornerstone of and supports economic development. A PPP-based energy infrastructure project is beneficial for alleviating developing countries' financial burden and for facilitating the diversified development of the energy market. Therefore, to increase government income and reduce infrastructure project costs, the PPP energy project construction model attracts considerable attention of various industries, especially in developing countries. For example, as gross domestic product growth decelerates and the government debt ratio rapidly increases, many Chinese provinces and cities face financial obstacles to economic development; therefore the Chinese government has issued a series of PPP-based energy policies. However, a number of risk factors associated with PPP projects, and conflicting interests between governments and private investors, have resulted in project failure. This study analyzes the development of PPP in China from the economic and industrial development perspective. It combines the latest PPP energy policies of China to solve problems that stem from the main risk factors involved in constructing and operating PPP energy projects. This research also provides game analysis for achieving maximum benefits as the government and the private investor have conflicting interests.

A Functional Analysis of Technological Innovation Systems in Developing Countries: An Evaluation of Iran’s Photovoltaic Innovation System

“…Hence, domestic and foreign investors should be attracted to this field. For example, public-private partnership (PPP) is an effective way to fulfill this goal [51,52]. Tax exemption policies for foreign companies that conduct joint research projects with domestic companies, as well as providing incentives such as tax exemptions for the entry of equipment for private domestic companies, are among the preferred policies [47].…”

“…Custom duty exemptions [44] Feed-in tariffs [45][46][47][48] Funding to support R&D [47,49] Venture capital in the field of energy [50] R&D equipment [46] Risk coverage support [51] public-private partnership (PPP) [52] demand pull policy [53,54] anti-dumping policy [53,54] tariff policies [53,54] distributed energy policy and demonstration projects [55][56][57][58] To sum up, policymakers should be aware that innovation policies have a very wide range of tools, none of which are necessarily better than the other; rather, each are effective in their own way. However, policymakers need to select these tools concerning specific policy contexts and the country's circumstances [41].…”

The Role of Public-Private Partnerships in Building Clean Energy Infrastructure in the United States and Nigeria

“…To enhance the effectiveness of PPPs in clean energy, policymakers can consider several policy recommendations focused on regulatory reforms, capacity building, technical assistance, and international collaboration. This essay outlines key policy recommendations and strategies for enhancing PPPs in clean energy (Tang, et al, 2019). Simplifying and expediting permitting and approval processes for clean energy projects can reduce regulatory barriers and administrative burdens, facilitating private sector participation.…”

Sustainable Development of Power Retailers and Industrial Parks in China’s Belt and Road Initiative

“…According to the cooperation between the private investor and the government, the energy infrastructure project construction could be effectively accelerated. However, a bunch of failed PPP cases shows that many risks need to be addressed and more policy support is required to construct a successful PPP energy project [40,41]. Compared to other financing methods, asset securitization could significantly reduce project risks and financial burdens of governments.…”