Research On The Shortest Financing Period Of PPP Project

With the development of economy and society,China is gradually promoting the use of PPP mode for various infrastructure construction,and introducing social capital into the field of rural water supply.The determination of the shortest financing period of PPP project is the key consideration of investment decision-making,which is related to whether social investors can recover the input cost and obtain reasonable income,and even directly affects the success or failure of PPP project.At present,the determination of the financing period is not scientific in terms of process and method.It does not start from the actual cash flow of the project and mainly depends on bank loan plan and risk assessment.Therefore,it is urgent to find a more reasonable method to determine the shortest financing period of the project and provide effective support for the financing scheme of the project to ensure the smooth progress of the project.Starting from the perspective and position of social investors and combined with the current reality,this paper first summarizes the research on PPP concept,financing period theory and real option theory,and points out the lack of research on the shortest financing period of PPP project.Then,through investigation and research,this paper analyzes and summarizes the steps,methods and existing problems of determining the financing period of PPP project,and then takes x water supply project as an example,The shortest financing period of the project is determined by considering the cash flow method to increase the value of real options.Therefore,it is concluded that using the cash flow method based on real options to determine the shortest financing period of the project is more suitable for the actual strategic investment value of the project.It is expected to provide reference for social investors when making financing decisions for PPP projects,At the same time,it also enriches the practical value of cash flow method and real option value research.