Risk Management Of Infrastructure Projects Financing Under PPP Mode

With the rapid economic development in our country, the demand of infrastructure projects is increasingly high, while the lack of infrastructure projects due to the shortage of investment and single financing channels has gradually restricted the economic and social sustainable development. At the same time, PPP model has shown a huge advantage in the field of infrastructure projects finance and has been put into practice successfully in many countries in the world as its theoretical framework has developed into a mature stage. Since 2004, China has adopted policies and regulations to allow private capital to enter the field of infrastructure, public utilities and other industries which is not banned in law. However, as the organizational structure and operational mode of PPP model are more complex, as well as the special features of infrastructure projects finance, the application of PPP model in the field of infrastructure construction in China has a higher risk. Therefore, there is one strong need to strengthen the risk management for infrastructure projects under the PPP mode for the realization of successful use of PPP Model in infrastructure finance in China.Taking the current situation of infrastructure financing development as prologue, with the data from "China Urban Construction Statistics Yearbook"(2005-2009), this paper conducted the analysis on the proportion of investment and funding sources in the areas of infrastructure construction in China within the last five years.Based on the theoretical framework of PPP model, a detailed analysis on the feasibility, advantages and problems for the application of PPP model in the field of infrastructure projects financing in order to provide a research background and theoretical basis for the risk management study on the PPP mode of infrastructure projects finance.This paper focuses on the study of risk management, for the research on PPP mode in financing infrastructure projects to identify risks and to assess the relative risks through constructing one risk assessment model based on the optimized FAHP, and to share the risks through constructing one risk-sharing model based on utility theory and game theory, and to take one specific PPP case as case studies to put the corresponding results and models into practice.