March 8, 2021
Theses on the Financing of Municipal Projects
Private-sector financing of public construction and investment projects is becoming increasingly important for city treasurers. So-called “PPP models” (Public-Private Partnerships) are used here, which are preceded by a detailed project analysis. This is extremely important because the target parameters of the parties involved (the municipality on the one hand with the goal of efficient provision of public services / security of supply and the private operator on the other hand with the goal of maximizing its profit) could be very different.
Financing Structure and Social Impact Bonds
Important points of a project are the definition of the project structure and the financing structure, as these can be used to “balance” the different objectives. So-called “Social Impact Bonds” could be an appropriate method to ultimately incentivize a “benefit success” or to tie profit shares to the benefit.
Need for Future-Proof Investments and Solutions
Projects in the area of public services are affected by investment holdups and require short-term solutions. Particularly in outpatient healthcare, but also in schools and modern urban development (smart city), to name just a few examples, action must be taken quickly to improve the situation with different and appropriate financing approaches.
Optimization of Financial Structuring
There are several ways to achieve greater cost efficiency for municipal projects. A financial partner such as North Channel Bank serves as a financing and, if necessary, information platform.
For detailed information, please read the entire guest article by Harald Zenke, Managing Director, North Channel Bank, in KLM Magazine (in German only).
Download Article, KLM Magazine No. 01/2021 in German Only
(With kind approval of the copyright holder)