Public–private equity joint ventures and risk transfers in motorways of the sea

Abstract

Purpose The purpose of this paper is to present a new scheme of public–private partnership (PPP) within the framework of motorways of the sea (MoS) similar to that of an equity joint venture along with a methodology for valuing risk transfers arising from options embedded in the clauses included in such agreement. Design/methodology/approach The architecture of the proposed PPP is an adaptation to the scope of a MoS of collaborative schemes commonly used in industry such as equity joint ventures. The methodology for valuing options involved making use of a valuation tree of optimal cashflows along with algorithm designs from the field of financial and real options. Findings The proposed structure of public–private equity joint venture (PPEJV) increases the stability of private–public collaboration as compared with standard PPPs, so as to achieve the desired modal shift. The analyzed case study shows how the methodology provides valuable numerical information for both negotiating partners and policy makers. Practical implications This study provides a quantitative tool for policy makers to redefine the role that public agents and public funds should play in a future sustainable mobility model. Originality/value The originality of the authors’ contribution to the field of PPPs in transport is triple. First, there is no precedent in the literature on PPPs of an architecture similar to that of the proposed PPEJV. Second, unlike the usual practice in the valuation of financial or real options, no prior structure is assumed for modelling the behaviour of cashflows. Third, the type of options addressed is not usual neither in the real options literature in general nor in the valuation of guarantee mechanisms included in PPPs in particular.

Visualizing the landscape of blue finance for sustainable development: A bibliometric analysis and future directions

“…They employ blue bonds that satisfy investment standards and accountability (Thompson, 2022) to safeguard the trustworthiness of investment markets. Additional solutions involve creating public‐private partnerships to handle initial capital expenses (Juan & Olmos, 2019), financial institutions incorporating environmental and social sustainability into risk assessments and investments (Gambetta et al, 2021), and influential stakeholders such as pension funds, sovereign wealth funds, and large passive investors exerting their influence in various extractive industries (Galaz et al, 2018).…”