American Society of Civil Engineers

Alternate Financing Strategies for Build-Operate-Transfer Projects

by John E. Schaufelberger, M.ASCE, (Assoc, Prof., Dept. of Constr. Mgmt., Univ. of Washington, 116 Architecture Hall, Box 351610, Seattle, WA 98195-1610) and Isr Wipadapisut, (Proj. Controls Engr., Worley Intl. Inc., 13105 Northwest Freeway, Suite. 200, Houston, TX 77040-6312)

Journal of Construction Engineering and Management, Vol. 129, No. 2, March/April 2003, pp. 205-213, (doi:

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Document type: Journal Paper
Abstract: This paper contains a study of build-operate-transfer (BOT) project financing strategies from the perspective of project sponsors. The financing strategy for a BOT project includes the selection of the appropriate mix of equity and debt financing, and the identification of appropriate financing sources. Project sponsors typically wish to minimize their financing costs to ensure their tenders are competitive. Thirteen transportation and power-generation BOT projects in North America and Asia were analyzed. Important considerations and financing strategies were identified and examined. The findings suggest that project risks, project conditions, and availability of financing are the major considerations in selecting a financing strategy. The project risks that were determined to be most significant in financing strategy selection were political, financial, and market risks. Based on the study findings, a decision model was developed that can be used by BOT project sponsors in selecting appropriate financing strategies.

ASCE Subject Headings:
Construction management
Financial factors