finance structure wanted by privateoperators of water businessin southeast asia by kozo bando
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8/6/2019 Finance Structure Wanted by PrivateOperators of Water Businessin Southeast Asia by Kozo Bando
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Finance Structure Wanted by Private
Operators of Water Businessin Southeast Asia
Kozo BandoGlobal Water Recycling and Reuse System Association (GWRA)
Kajima Corporation
24th April 2011
1. Introduction of GWRA
2. Current Financing Issues in the Region
3. Preferred Financing Arrangement
8/6/2019 Finance Structure Wanted by PrivateOperators of Water Businessin Southeast Asia by Kozo Bando
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a. Founded in November 2008 & has 50 membercompanies among industries of construction, plantengineering, electricity, machinery, material andfinance
b. Aims at supporting Japanese companies toparticipate in water business overseas
c. Promotes activities: Collection and analysis of water business information;
market, policies and risks Assistance of technology development through
establishment of demonstration plants with Governmentassistance
Assistance in project finding & project development
2
Introduction of GWRA
8/6/2019 Finance Structure Wanted by PrivateOperators of Water Businessin Southeast Asia by Kozo Bando
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c. NEDO demonstration study projectWATER PLAZA (Kitakyushu City)
Aeration tanks
100m
Sewage water RO production: 1,000m3/d
Sea water RO production: 400m3/d
Total water production:
1,400m3/d
Sea
Final sedimentation tanks
Digestertanks
100m
Test Bed area
Kitakyushu City
Test Bed
Water recycling facilities
MBR Area
UF/RO Area
Project site: 5 sections(9m×20m /section)
Demo Plants
Primarysedimentation
tanks
Offered by GWSTA(Global Water Recycling and Reuse Solution Technology Research
(6000㎡)
WATER PLAZA
Theme: Experimental research onintegrated system to recycle seawater
and sewage water.
8/6/2019 Finance Structure Wanted by PrivateOperators of Water Businessin Southeast Asia by Kozo Bando
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Current Financing Issues
1. Low Tariff
Viability Gap (not Bankable) Subsidized Operation
2. Difficult Financing Arrangement
No Long-Term Financing in Local Currency3. Premature Regulatory Conditions
PPP Regulation
Dispute Resolution
4. Risks Private Operators Cannot Control
Country Risk
FOREX Risk
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Preferred Financing Arrangement
1. Public Contribution
For Viability Gap Make Bankable
2. Use of ODA
Loan, Grant, Investment, 2-step Loan
Implementation by PPP Scheme
Minimize Risks
3. Procurement from Commercial Institutions
Relaxed Criteria for Loan and Investment forPublic Service Sectors
Loan in Local Currency