In addition, it is often advantageous to include as equity holders investors from the local business community. Each party brings to the project different attributes, all of which are important. The government must grant the concession to the project company under terms that make its success likely, while at the same time protecting important national policy considerations. The level of government support will also impact the ease with which financing for the project is achieved. The industry player brings market savvy, reputation, and presumably a track record of success in similar projects, and will instill confidence in lenders.
Local investors bring equity and can help with local issues.
Their presence might help convince lenders that the government will support the project to the fullest extent. Structuring a bankable project It is important that all obstacles to the creation of a local company in which there is significant foreign ownership be eliminated. Equity and capital requirements should be set so as to amount to significant investment on the part of each participant, but with due regard to the fact that the bulk of the project will be financed. Payment from the government for unamortised equipment, options to extend and maintenance issues in the later years need to be addressed. Commitments towards use of the facility Since liner operators continually seek the best available deal for landside services, which is not surprising in view of the razor-thin margins which exist in that business, a government may wish to be comfortable that the partner it has chosen is committed to the port.