Malaysia: Project Financing and Private Finance Initiatives (PFI)

Posted by on Aug 2, 2011 in Project Financing / PFI (Private Finance Initiatives), Services

Malaysia: Project Financing and Private Finance Initiatives (PFI)

Malaysia Financial Institutions (FI) will provides funds to finance the cost to complete project or contracts awarded by the government, Multi National Corporations (MNC)  or established public listed companies (PLC). Normally the FI will finance up to 80% of the 80% contract value. BOLEH Capital advise how  to secure 20% of balance (mezzanine financing). Hence, it can helps the businessman to complete the project without facing cashflow issue.

 

PFI - Malaysia Public Private Partnership / Private Finance Initiatives (PFI) Programme

General Criteria
The selection for PPP/PFI involves a ‘filtering process’ whereby certain criteria should be met:

  • Output specification can be clearly identified and quantified
  • Economic life of the asset or service should be at least 20 years
  • Projects with technological obsolescence risk (technology used will be superseded in short term) will not be considered
  • Project sponsor must be financially strong with a paid up capital of the special purpose vehicle (SPV) to be at least 10% of the project value

Structuring a PPP project involves bringing together relevant private sector parties with clearly defined tasks and risks of the project. The main parties would include:
SPV created specifically for the project

  • financiers
  • construction contractor
  • facilities management operator
  • public sector (procuring authority)