Financing strategies for build-operate-transfer projects

The build-operate-transfer (BOT) delivery method has been used for many infrastructure projects in various countries. In this delivery, method, the project sponsor is responsible for financing, designing, and constructing the project and operating it for a certain concession period. Project sponsors face several major risks when executing these projects. Financial success depends on all analysis of the risks to be faced and the selection of an appropriate mix of equity and debt financing. This paper contains an analysis of alternative project financing strategies and examines several transportation and power-generation BOT projects. The findings indicate that political, financial, and market risks had the greatest influence on the selection of appropriate financing strategies.