Study On The Refinancing Of PPP Project Based On Real Option Theory

At present, China is vigorously promoting the application of PPP projects in infrastructure projects, there are a large number of infrastructure projects which have adopted the PPP mode, but with large investment scale, financing structure complex, the long negotiation cycle, risk factors, large cost fluctuation, the financing leverage is bigger, in the future environment the project benefits can change accordingly in the face of political, legal, market, and interest rates, exchange rates fluctuate, inflation and other factors. So in the actual operation of the PPP projects we need to adjust the financing instruments and conditions as a result of the project environment change which is known as the PPP project refinancing.But there is a big misunderstanding about the understanding and using of the PPP project refinancing, for instance,1) Lack of a clear understanding and definition of PPP refinancing.2) Not make sure of the uncertain factors affecting the PPP project refinancing, and lack of the system induction and analysis about refinancing way.3) The idea of refinancing is old and lack of forward-looking, so the refinancing is always used when the business environment worsens.Therefore, the understanding and know of the PPP projects refinancing is particularly important.In this paper, the condition, process, and concrete way of PPP project refincing will be presented in detail. First the paper found out the factors lists by using the factors which affects the enterprise refinancing and the PPP project success factors, then tested the lists with12PPP projects case.The real options theory is introduced to the PPP project refinancing design in order to aimed at the influence factors, which based on identification, pricing the implied options in the influential factors, and negotiating with the project stakeholders to complete the PPP project refinancing design. At last the paper made a case analysis to validate the ideas of using options to construct the model combining with the concrete case-X high-speed. Theoretical framework of this paper is helpful to improve the PPP mode, at the same time again for the PPP project financing practice has guiding significance.This paper is helpful to improve the theoretical framework of the PPP mode, and has guiding significance for the practice PPP project refinancing at same time.