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Article
Publication date: 12 March 2019

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…

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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

Engineering, Construction and Architectural Management, vol. 26 no. 5
Type: Research Article
ISSN: 0969-9988

Keywords

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Article
Publication date: 27 January 2025

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…

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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.

Details

Engineering, Construction and Architectural Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0969-9988

Keywords

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