New Directions in Financing Water and Power Projects

by Kathy Wood Loveless, Kirchner Moore & Co, Salt Lake, City, UT, USA,

Document Type: Proceeding Paper

Part of: Water Power '87


The financing of water and power projects is not business as usual. Two changes in recent times have resulted in major realignments in the way water and power projects are being financed. The first of these changes was the establishment of front-end financing required by the Reagan Administration, and the second is the Tax Reform Act of 1986. Against the backdrop of these major changes, state and local governments have had to use totally different ways of financing their water and power projects. Since they must now pay a portion of the costs of the beginning of the project, greater attention is paid to the economic viability of every project. This, of course, was the intent of the up-front financing requirements. The theory was that if local governments knew they had to provide a portion of the funds, they clearly would not ask for projects that did not make economic sense. Different ways of financing water and power projects have emerged. This paper discusses two briefly and two more in greater detail.

Subject Headings: Hydro power | Financing | Local government | Economic factors | Electric power | Case studies | Construction management | Taxation

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