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Responding to the Global Financial Crisis: B.C.’s Perspective

Responding to the Global Financial Crisis: B.C.’s Perspective. PPP Days 2010, Asian Development Bank / World Bank Institute, Manila March 22, 2010 Larry Blain, CEO, Partnerships BC. 1. Purposes of Private Financing. Financial capacity for the concessionaire to absorb risk, in the event of:

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Responding to the Global Financial Crisis: B.C.’s Perspective

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  1. Responding to the Global Financial Crisis: B.C.’s Perspective PPP Days 2010, Asian Development Bank / World Bank Institute, Manila March 22, 2010 Larry Blain, CEO, Partnerships BC 1

  2. Purposes of Private Financing • Financial capacity for the concessionaire to absorb risk, in the event of: • Deductions in ASPs due to poor performance • Occurrence of a transferred risk event • Project oversight and risk mitigation • Lenders monitor the concessionaire/equity investor • Lenders take corrective actions if • Poor performance of concessionaire; • Inadequate financial capacity of concessionaire;

  3. Principals Guiding Use of Private Financing • Optimize use of private capital: • Sufficient to transfer risk • Capital service during construction; • Capital during operations; • Efficient financing in market. • No subsidy from government contributions • All private capital ranks behind Province; • No benefit to banks, they take the same risks as before. • Maintain evaluation flexibility to get the best deal for the Province • All deals to date have been “A”, half with ratings

  4. Funding Contributions:Older Transactions

  5. Funding Contributions:Current and Most Recent Transactions

  6. Project IRRs:Current and Most Recent Transactions

  7. Private Capital Exposure to Risk:Health Sector

  8. Private Capital Exposure to Risk:Transportation Sector

  9. Fort St. John Hospital and Residential Care • Under construction • DBFM • $297.9 million • Expected benefit: $20.7 million • May 2012 completion • 55-bed acute care hospital; 123-bed residential care facility • First PPP to use wide equity financing • LEED Gold • Bids did not meet Affordability Line Private Partner: ISL Health 9

  10. BC Cancer Agency Centre for the North • Under construction • DBFM • $69.9 million • Sept 2012 completion • 5,000 square-metre cancer centre in Prince George • Wide equity financing • LEED Gold • All bids under Affordability Line Private Partner: Plenary Health 10

  11. Sign up for updates about Partnerships BC www.partnershipsbc.ca 11

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