PublicPublic--PrivatePrivate PartnershipPartnership 1.1. ExpandingExpanding thethe ScopeScope ofof ProjectsProjects
2.2. InnovativeInnovative FinancingFinancing CombinationsCombinations betweenbetween BanksBanks andand InstitutionalInstitutional InvestorsInvestors
JERUSALEM – TEL AVIV – HAIFA 1 YEHUDAYEHUDA RAVEHRAVEH && CO.CO. LawLaw OfficesOffices •• IsraelIsrael •• EuropeEurope •• NorthNorth AmericaAmerica
www.yraveh.co.il
JERUSALEM – TEL AVIV – HAIFA 2 P.P.P.P.P.P. –– Public Public PrivatePrivate PartnershipPartnership
B.O.T. – Build-Operate-Transfer B.O.O. – Build-Operate-Own P.F.I. – Private Finance Initiative
OwnerOwner
Shareholders LendersLenders SPCSPCSPC Shareholders
ContractorContractor OperatorOperator
JERUSALEM – TEL AVIV – HAIFA 3 P.P.P.P.P.P. –– Expanding Expanding thethe ScopeScope ofof ProjectsProjects SuitableSuitable forfor thesethese MethodsMethods Recently, we witness expansion of the use of the P.P.P. methods to areas that were previously and traditionally considered as unsuitable The Traditional Perception – P.P.P. is suitable mainly for large infrastructure projects initiated by Governments The Perception Today – P.P.P. is suitable also for middle sized projects (not necessarily infrastructure projects and not necessarily initiated by Governments) Main Examples: Municipal Projects Non Profit Organizations’ Projects
JERUSALEM – TEL AVIV – HAIFA 4 SampleSample ofof ProjectsProjects SuitsSuits forfor thethe MunicipalMunicipal SectorSector (1)(1) Water Projects Sewage Projects Parking Facilities Schools, Colleges and Universities Hospitals Municipal buildings Cultural centers Offices Commercial Centers
JERUSALEM – TEL AVIV – HAIFA 5 SampleSample ofof ProjectsProjects SuitableSuitable forfor thethe MunicipalMunicipal SectorSector (2)(2) Municipal Power plants Solar and Clean-tech Facilities Municipal Desalination Projects Schools Sport centers Day Care centers Projects built by Donations Almost any income generating project
JERUSALEM – TEL AVIV – HAIFA 6 SampleSample ofof IsraeliIsraeli P.P.P.P.P.P. ProjectsProjects inin thethe MunicipalMunicipal SectorSector Tenders for sewage-treatment facilities (Jerusalem, Akko, Hadera) Nation Square Complex in Jerusalem (parking and commercial project) Municipality Building in Jerusalem Office complex in Raanana Light Train projects in Tel-Aviv and Jerusalem (joint venture with the government)
JERUSALEM – TEL AVIV – HAIFA 7 InnovativeInnovative FinancingFinancing SystemsSystems forfor MunicipalMunicipal ProjectsProjects General Obligation (G.O.) Bond; or – Revenue Bond – specified stream of future income (This Option enables struggling municipalities to leverage profitable projects located in the region for the purpose of bonding, while isolating such revenues from other activities of the Municipality) Rating Agency Primary market or Secondary market (Stock Exchange) SPC – a municipal sole-purpose company
JERUSALEM – TEL AVIV – HAIFA 8 Non-ProfitNon-Profit OrganizationsOrganizations
Non-Profit organizations which holds real-estate are most suitable of entering into P.P.P. Projects : Posses suitable land Free from red-tape and regulatory obstacles Usually not obligated to issue a tender More flexibility in negotiating with the private sector Can assist on getting the first equity for the project from donors Enables leverage of real-estate assets in order to enhance and develop projects P.P.P. projects will surely increase the number of projects in this sector
JERUSALEM – TEL AVIV – HAIFA 9 Israel’sIsrael’s FirstFirst InfrastructureInfrastructure FundFund (1)(1)
As part of the general policy to increase the involvement of the private sector in the development of infrastructure, there is a need for Infrastructure Funds. The first infrastructure fund in Israel is Israel Infrastructure Fund (“IIF”) Main rolls of the Fund: • Raising capital for investments in infrastructure projects being built by the private sector. • Locating infrastructure projects that have good potential. • Serving as an “arranger” for raising the needed funds together with other funds, banks and accredited investors.
JERUSALEM – TEL AVIV – HAIFA 10 Israel’sIsrael’s FirstFirst InfrastructureInfrastructure FundFund (2)(2)
The fund will invest in small and medium size PPP projects, focusing on development of projects that are not in the public domain and that institutional investors would otherwise have limited access to. Most of the Investors in the Fund are Institutional Investors. The Fund identifies for the Institutional Investors low risk, long terms investments. The return on the investments in the Fund is projected at % per annum.
JERUSALEM – TEL AVIV – HAIFA 11 InnovativeInnovative FinancingFinancing CombinationsCombinations betweenbetween BanksBanks andand InstitutionalInstitutional InvestorsInvestors
The Traditional Perception: Banks negotiated the Financing and served as “Arrangers”. Institutional Investors “played” the role of co-investors. The New Perception: Banks and Institutional Investors join together in the Financing (including negotiations), while Banks negotiate and finance the short-term construction credit facilities, the Institutional Investors negotiate and finance the long-term credit facilities.
JERUSALEM – TEL AVIV – HAIFA 12 AA FewFew SelectedSelected B.O.T.B.O.T. // P.F.I.P.F.I. ProjectsProjects inin whichwhich ourour officeoffice hashas beenbeen involvedinvolved
Cross Israel Highway The Municipality Square in The Tel-Aviv LRT Jerusalem The Jerusalem LRT The Nation Square Parking Complex in Jerusalem The Tel-Aviv and Jerusalem Fast Lanes Expansion of the Knesset Building Ashkelon Desalination Facility Student Dormitories Complex Ashkelon IPP Imprisonment Facility in Be’er Sheva Hadera Desalination Facility Representing International Bidders Road 431 on B.O.T. Projects in the Road 531 Transportation Field in: Greece, Republic of Czech, Poland, Bulgaria, Natural Gas Transmission System Mexico and other Countries
JERUSALEM – TEL AVIV – HAIFA 13 SelectedSelected ProjectsProjects inin whichwhich ourour officeoffice hashas beenbeen involvedinvolved –– B.O.T. B.O.T. CrossCross IsraelIsrael HighwayHighway // SectionSection 1818 Largest B.O.T. Project in Israel as of today Estimated cost – 1.32 billion US dollars for main project; 180 million US Dollars for Section 18 86 km inter-city roads, 14 intersections, 140 bridges, 2 tunnels, control & operating center Titled “Project of the Year” in the Project Finance Magazine of 1999; Section 18 awarded “Project Finance Deal of the Year 2007” Our firm has represented the concessionaire, the international consortium, throughout the tender process, including the Financial Close and continues to represent the operation of the project.
JERUSALEM – TEL AVIV – HAIFA 14 SelectedSelected ProjectsProjects inin whichwhich ourour officeoffice hashas beenbeen involved–involved– P.F.I. P.F.I. RoadRoad 431431 PFI project for building and operating road of 22 km., 3 lanes each direction Estimated cost – 500 million US dollars Banks funded short term construction loans and the Institutional Lenders committed to fund the long terms loans Awarded “Project Finance Deal of the Year 2006” Our firm represents the lenders – Bank Hapoalim, HSBC, Bank Mamizrahi-Tfahot, First International Bank of Israel, Harel Insurance Group, Clal Insurance Group, New Mivtachim Fund, Menorah Insurance Group and Mivtachim Fund.
JERUSALEM – TEL AVIV – HAIFA 15 SelectedSelected B.O.T./P.F.I.B.O.T./P.F.I. ProjectsProjects inin thethe PipelinePipeline
P.F.I. Roads Solar Energy Facilities Natural Gas Powered Private Power Plants Alternative Energy Power Plants Police Academy Facilities Military Facilities
JERUSALEM – TEL AVIV – HAIFA 16 SummarySummary
Opportunity to recruit the creativity and innovation at the base of the P.P.P. projects for the benefit of Municipal Projects and Non Profit Organizations’ Projects Integration of the B.O.T. method with the P.F.I. method can promote many partially financed projects. The B.O.T. portion can be financed by the private sector and the residual part can be performed in the P.F.I. method or by way of fund raising Opportunity for struggling entities to initiate large scale projects Basically, any yield-giving project may be initiated and performed by way of the P.P.P. method
JERUSALEM – TEL AVIV – HAIFA 17 יהודהיהודה רוהרוה וש וש ותות'' .YEHUDA RAVEH & CO משרד עורכי דין Law Offices יר ו של י ם - רח' אוסי שקין 26, ת.ד. Jerusalem - 26 Usishkin St., P.O.B. 7722 7722 תל אביב - בית רובינשטיין, רח' לינקולן Tel Aviv - Rubinstein House, 20 Lincoln St. 20 ח יפה - בית אמות חיפה, דרך יפו Haifa - Amot House Haifa, 157 Jaffa Rd. 157 באר שבע – רח' עצמאות Beer Sheva – 49 Atzmaut St. 49
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JERUSALEM – TEL AVIV – HAIFA 18