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Bankability

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International Project Finance
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Abstract

Bankability refers to the ability of a project to raise finance. It is the evaluation of the viability of specific infrastructure projects and the risks involved with them. It is the responsibility of investors (i.e., international commercial banks) to assess the value and risks of an infrastructure project, its bankability, and then provide the capital to fund the project. The bankability of an infrastructure project is determined at a much earlier phase of project life. When assessing the bankability of a project, investors are concerned with the overall costs, timelines, parties involved, return on the investment, and any other factors that would make up the risk profile.

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Notes

  1. 1.

    World Bank (2017): Bankability in Highway PPP Projects, PPIAF, https://ppiaf.org/documents/3181/download.

  2. 2.

    Hassan Ibrahim El Fathali (2015): Private Partner Selection and Bankability Assessment of PPP in Infrastructure Projects, Thesis for the Degree of Doctor of Philosophy (Civil Engineering) at Concordia University, p. 72.

  3. 3.

    The World Bank (2020): Key Issues in Developing Financed Transactions, https://ppp.worldbank.org/public-private-partnership/financing/issues-in-project-financed-transactions.

  4. 4.

    Step-in rights are rights given to lenders in project-financed arrangements to “step in” to the project company's position in the contract to take control of the infrastructure project where the project company is not performing.

  5. 5.

    The World Bank (2020): Risk Allocation Bankability and Mitigation in Project Finance, https://ppp.worldbank.org/public-private-partnership/financing/risk-allocation-mitigation.

  6. 6.

    Tillmann Sachs, Robert Tiong, and Shou Qing Wang (2007): Analysis of Political Risks and Opportunities in Public–Private Partnerships (PPP) in China and Selected Asian Countries, Researchgate.net.

  7. 7.

    Victor Platon, Simona Frone, and Andreea Constantinescu (2014): Financial and Economic Risks to Public Projects. Procedia Economics, and Finance, Vol. 8, 204–210.

  8. 8.

    The World Bank (2016): Country Readiness Diagnostic for Public–Private Partnerships, https://thedocs.worldbank.org/en/doc/943711467733900102-0100022016/original/CountryPPPReadinessDiagnosticTool.pdf.

  9. 9.

    The World Bank (2021): Regulation of Sectors and Regulatory Issues Impacting PPPs, https://ppp.worldbank.org/public-private-partnership/regulation-sectors-and-regulatory-issues-impacting-ppps.

  10. 10.

    Fida Rana (2017): Preparing Bankable Infrastructure Projects, The World Bank Blogs, https://blogs.worldbank.org/ppps/preparing-bankable-infrastructure-projects.

  11. 11.

    Oshani Perera, David Uzsoki, and Fida Rana (2017): Project Preparation Facility: Enabling Local Governments Access to Private Finance, International Institute for Sustainable Development, p. 3, https://infrastructure.iisd.org/research-and-reports/project-preparation-facility-enabling-local-governments-access-private-finance.

  12. 12.

    Fida Rana (2017): Preparing Bankable Infrastructure Projects, The World Bank Blogs, https://blogs.worldbank.org/ppps/preparing-bankable-infrastructure-projects.

  13. 13.

    Jenny Chao, and Jason Zhengrong Lu (2020): Using Government Guarantees Carefully as the Private Sector Redefines Bankability, World Bank Blogs, https://blogs.worldbank.org/ppps/using-government-guarantees-carefully-private-sector-redefines-bankability.

  14. 14.

    Christoph Rothballer and Philipp Gerbert (2015): Preparing and Structuring Bankable PPP Projects, Public Private Partnerships for Infrastructure and Business Development, pp. 57–80.

  15. 15.

    Sebnem Erol Madan (2020): Is There a Tradeoff Between Debt Sustainability and Infrastructure Investment? World Bank Blogs, https://blogs.worldbank.org/ppps/there-tradeoff-between-debt-sustainability-and-infrastructure-investment.

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Correspondence to Felix I. Lessambo .

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Lessambo, F.I. (2022). Bankability. In: International Project Finance. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-96390-3_4

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  • DOI: https://doi.org/10.1007/978-3-030-96390-3_4

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