Project Finance and Private Public Partnership in financing logistics infrastructure

Project financing and Private Public Partnership are extremely helpful techniques to finance lo-gistics and transportation infrastructures. Huge amounts of project financing debt have been raised to fund projects like motorways, distriparks, maritime ports, intermodal logistic platforms. These infrastructures are built, owned and operated by special purpose vehicles (SPVs), organized for that single project and financed mainly by debt. In many cases, SPVs are not wholly owned by private investors since governments, public authorities and international organizations take equity stakes in them, creating private-public partnerships (PPPs). This brief note enlighten three particular issues: i) the contractual architecture required by project financing prevents possible market failures and opportunistic behaviors; ii) project financing can exploit the positive externalities produced by an infrastructure, to enhance the funds available; iii) PPP can provide a viable solution when a project is not financially sustainable but nonetheless, recognizing its importance for the community, the government decide to support it.