Resource Financed Infrastructure: A Discussion on a New Form of Infrastructure Financing

Abstract

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Public‐Private Partnerships Used to Manage Water in Mexico: Puebla, a Case Study

“…Services outsourcing must take place within a legal and economic framework adequately suited for PPPs (Hávard et al 2014). In this way, well-planned, adequately structured, and better-applied contracts with third-party service providers will become the norm, which will result in (internal) regulation by means of the concessionaire's own responsible processes.…”

The new structural economics: patient capital as a comparative advantage

“…(Halland et al, 2014, p. 13). Halland et al (2014) highlighted the most important advantage of the RFI approach, and that is this approach "can bring substantial benefits to a [host] country and its citizens,... years ahead of what would have been possible under any other model." (Halland et al, 2014, p. 14).…”

New Structural Economics and Resource Financed Infrastructure

“…Put simply in Halland et al . (, p. 13):

the RFI model is a financing model whereby government pledges its future revenues from a resource development project to repay a loan used to fund construction of infrastructure. The key advantage of the model is that a government can obtain infrastructure earlier than it would have been able to if it had to wait for a resource project to produce revenues.

…”

“…After comparing various conventional approaches of infrastructure financing, their pros and cons and gaps, Halland et al (, p. 14) highlight the most important advantage of the RFI approach; that is, that the approach ‘can bring substantial benefits to a [host] country and its citizens,… years ahead of what would have been possible under any other model ’. However, the study says relatively little about the ‘structural’ side of the economies, not to mention structural transformation.…”

“…Second, on the ‘valuation’ issue of the RFI approach, Halland et al () indicate that, ideally, ‘an RFI credit may be the least‐cost option for obtaining essential infrastructure that cannot generate sufficient revenue to support a project finance transaction’. The study also rightly points to gaps left by the previous infrastructural financing models, which could be filled by the RFI approach, including the interesting feature of ‘nonrecourse’ loans.…”