Financing Decision Analysis of Sewage Treatment Plant BOT Project
|Course||Technology Economics and Management|
|Keywords||Sewage treatment BOT Financial Evaluation Risk Analysis Financing Decision|
With the arrival of summit in China’s sewage treatment facility construction, the simple dependence on fiscal funding cannot fully support the demand of contemporary water treatment projects. In the period of "12th Five-Year Planning", China will construct at least1184new urban sewage treatment plants. The total investment in urban sewage treatment is expected to reach450billion yuan, showing that China attaches great importance to the construction and development of sewage treatment facilities. The construction of sewage treatment facilities can not only alleviate the level of water pollution and reduce water consumption, but also adapt to China’s economic development and be in line with the sustainable development concepts and ideas. Sewage treatment projects in China should be free from relying solely on government fiscal funding. The shift to project financing is urgent.Firstly, this thesis bases on the significance and current situation of China’s sewage treatment facility construction. The necessity of BOT financing model is discussed, combining with relevant theories, strengths, operating processes, etc. Moreover, the application prospect is stated. Thus the crucial role of private capital financing is shown to readers.Secondly, through the introduction of BOT project financial evaluation system, this paper introduces the contents, methods and steps in BOT project financial evaluation, which prepares for further study. On this basis, using the BOT project in Shouguang Northern Town sewage treatment plant as a case, this paper introduces the project background and significance and analyzes the main factors to be considered in the BOT project investment from the perspective of investors. Furthermore, through data proce3sing and computing, this paper analyzes the economic evaluation, funding sources and financing options of this project. Viability and profitability analysis are also given by calculating the benchmark rate of return. Finally, this paper points out risks that may arise in the operating process of the project, basing on the uncertainty and risk theories. Corresponding avoidance strategies are then stated, combining with breakeven analysis, sensitivity analysis and project risk analysis. It provides guidance for investors’decision-making.