Page 81 - 95

INFRASTRUCTURE & RESOURCE

The basis to establish

the EPC Project Finance

With this second article on the Best
Practices in the EPC world, we analyze
the methodologies in the ever-growing
needs for project financing

Massimo Rebecchi, President and CEO
Xylem

rivate Investment in major infrastruc-
ture projects is not unusual. Prior to
World War I, railways, roads, bridges,
power plants, ports, water works and
gas-distribution systems were being
Pbuilt all over the world by private en- Today, Project Finance is being
trepreneurs. These projects were largely financed introduced in both developed
by private capital, provided by entrepreneurs willing
to risk all in return for high rewards. Fortunes were “and developing countries
made and lost. as an alternative way to finance
infrastructure and industrial
During the 19 Century ambitious projects such
th
as the Suez Canal and the Trans-Siberian Railway projects, both small and large
were constructed, financed and owned by private
companies. However, the private-sector entrepre-
neur disappeared after World War I and as colonial projects in industrialised countries were built un-
powers lost control, new governments financed der the supervision of the state and were funded
infrastructure projects through public-sector bor- from their respective budgetary resources of so-
rowing. The state and public-utility organisations vereign borrowings.
became the main clients in the commissioning of This traditional approach of government in iden-
public works, which were then paid for out of ge- tifying needs, setting policy and procuring infra-
neral taxation. structure was by and large followed by developing
countries, with the public finance being supported
During this post-World War I period in Europe, by bond instruments or direct sovereign loans by
states invested in the reconstruction of war- such organisations as the World Bank, the Asian
damaged infrastructure and new nationalised Development Bank and the International Monetary
industries. After World War II most infrastructure Fund.

Impiantistica Italiana - Marzo-Aprile 2022 75