Juan David Gonzalez-Ruiz, Alejandro Arboleda, Sergio Botero and Javier Rojo
The purpose of this paper is to develop an investment valuation model using the mezzanine debt mechanism based on blue bonds that explicitly allude to public–private partnerships…
Abstract
Purpose
The purpose of this paper is to develop an investment valuation model using the mezzanine debt mechanism based on blue bonds that explicitly allude to public–private partnerships (P3s) and project finance (PF). Additionally, this study proposes the financial captured value (FCV) theory for measuring how much financial value lenders may capture by becoming sponsors through financing of sustainable infrastructure systems (SIS).
Design/methodology/approach
The investment valuation model was validated through the Aguas Claras wastewater treatment plant as a case study.
Findings
The empirical results show that lenders may capture financial value by converting outstanding debt into equity shares throughout the operation and maintenance stage. Furthermore, case study results provide new insights into the implications of the debt–equity conversion ratio on the relationship between the sponsors’ internal rate of return and the FCV.
Research limitations/implications
The most significant limitation is the lack of primary and secondary information on blue bonds. Thus, robust statistical analyses to contrast results were not possible.
Practical implications
Researchers and practising professionals can improve their understanding of how mezzanine debt, P3s and PF into an investment valuation model allows financing SIS using a non-conventional financial mechanism. The recommendations will benefit both the academia as well infrastructure industry in bridging the gap between design theory and practice.
Originality/value
Sustainability components have not been addressed explicitly or combined in the financing’s structuring. Therefore, the investment valuation model could be considered a novel methodology for decision making related to financing and investment of SIS.
Details
Keywords
Lei Zhu, Jinting Sun, Lina Zhang, Jing Du, Dezhi Li and Xianbo Zhao
It is a complex and dynamic process to provide high-quality rural infrastructure. However, there lacks a holistic performance evaluation method for rural infrastructure provision…
Abstract
Purpose
It is a complex and dynamic process to provide high-quality rural infrastructure. However, there lacks a holistic performance evaluation method for rural infrastructure provision that reflects changing rural social needs and takes a village as a whole. This study aims to develop a holistic and dynamic performance evaluation model for rural infrastructure in Mainland China.
Design/methodology/approach
This study established an evaluation index system by combining the lifecycle theory and the economy, efficiency, effectiveness and equity (4E) theory. This study developed an evaluation model by using the analytic network process (ANP) and matter-element analysis theory (MEAT). The model was validated by two representative villages in Mainland China.
Findings
The developed model can reflect dynamic social needs and effectively evaluate the overall infrastructure provision performance of a village. The weight of indicators reflects the changes in Mainland China’s contemporary rural social needs, with particular emphasis on the impact and output performance. The evaluation result shows that the overall performance of the representative villages was excellent but had a tendency toward good. Although the output performance was excellent, different input, process and impact performances resulted in different downgrade trends.
Originality/value
This study provides a theoretical basis for disaggregating the complex issue of the performance of rural infrastructure provision. The results can be used by relevant authorities to make a holistic and dynamic evaluation of the performance of rural infrastructure provision and timely revise planning and management policies.