Presentation: Application of PPP Model in China’s Wastewater Treatment Industry - Fifth Roundtable on Financing Water - Mr. Tianyi Wang

1. Application of PPP Model in
China’s Wastewater
Treatment Industry
WANG Tianyi, CEO, China Everbright International,
E-mail: wangty@ebchinaintl.com

2. 2
PPP Theory to Practice
• Public-Private-Partnership (PPP)，is a contract between a
private party and a government agency for providing a public asset or
service. In short, cooperation between government and enterprises
for public products.
President XI Jingping “Make full use of the market to support the cooperation between government and private
capitals through multiple methods.”
By September 2019, there are 12180 projects in China PPP Center list,
totaled ¥17.26 trillion. Lots of problems occurred because of rapid growth in a
short time.
◇ PPP regarded as a financing tool；
◇ In terms of specific project, problems including too many projects
claimed as PPP model, overinvestment, short cooperation period, and there are
some huge comprehensive PPP projects.
• Governments and
BusinessesPlayers
• Public Products or
Infrastructures
Areas
• Risk and Benefit
SharingRelation
Three Main Elements
Three Main Effects
Financing Efficiency Governance

3. 3
• NOT EASY to use PPP well，PPP is a dialogue between power and capital，and
a game between public interest and enterprise benefit.
◇ CONCEPT FIRST
◇ WITHIN CAPABILITY
◇ KEEP SIMPLE
 Benefit Sharing, Risk Sharing
 Reasonable Return, Incentive compatibility, Contract Spirit
 GOV: Identify, Design, Payment, Supervision
 BIZ: Investment and Financing, Technology and Management, Qualified Products and
Reasonable Return
 Laws and Regulations, Investment and Financing Model, Process Management
 PPP is marriage, not the weeding ceremony, complicated is not a good way
PPP Theory to Practice

4. 4
Application of PPP Model in China’s Wastewater Treatment Industry
First BOT
Project-
Water
Plant in
Chengdu
1997
Ministry of
HURD:
Measures for
Administration
of Franchise of
Municipal
Public Utilities
2004
PPP is
widely
used in
China
2014
Ministry of
Finance:
Deepening
cooperation
between the
government
and social
capital in the
field of public
services
2016
Water project in PPP model : From Single Project to
Integrated Project, imposing higher requirements for the
financing and management abilities of businesses, and
cooperation, payment and supervision abilities of the
governments.
Among all the 123 newly listed project in the PPP Center,
there are 26 water projects, only 11 is the single project.
Sewage Water Treatment、
Water Supply
• Single Project
Plant and Pipeline network 、
Water Supply and Treatment、
Comprehensive Treatment of
Water Environment
• Integrated
Project

5. 5
Analysis of Financing in Water Project
Analysis on the decisive factors of financing of water projects
Proportion of fiscal
expenditure of PPP
projects is within the
red line (10%) or the
waring line (7%)of
general public budget
of local government
GOVERNMENT
Credit rating,
enterprise strength
PRIVATE
CAPITAL
In Line with due
procedure and
requirement of the
product content
PROJECT
◆ It’ is not in line with the rules
that government providing
financing guarantee for PPP
project, and also against the
original intention of PPP
development
◆ From the perspective of
sustainable development,
project with the following
features is easier to be
successful: long-term operating
period, users paying, and stable
expected cash flow.

6. 6
How to Improve the Financing Capacity of PPP Projects
 GOVERNMENT: Ensure project compliance, Strengthen financial supervision，Control fiscal expenditure
responsibility, Cooperate to seeking low-cost financing channel.
 ENTERPRISES: Make prudent investment, Control the asset-liability ratio, Broaden financing and
refinancing channels, Reduce financing costs.
 PROJECT: Highlight the return mechanism, risk allocation, and performance evaluation mechanism during
Preliminary Design.
 Chinese government is also promoting the development of the environmental water industry through tax
policies, subsidies in specific fields, polluter pay system and other relevant ways. There is a bright future for
the environmental water industry.

7. Belt and Road Initiative Coalition for Green Development (BRICG)
130+ governments, businesses, think tanks, and international organizations
have joined the BRICG
Policy exchange and communication
Environmental knowledge and information sharing
Green technology exchange and transfer
China Everbright International(CEI)
CEI is the Global Lead Partners of the Green Technology Innovation and CSR
Thematic Partnership of BRICG， and Prof. WANG Tianyi, CEO of CEI is
one of the advisers of the advisory committee of BRICG
Largest Environmental Group in China
Largest Waste-to-Energy Company in Asia
Leading Water Treatment Company in China
with the largest number of PPP project in China
CEI is promoting the establishment of BRI Green PPP Research and
Promotion Center with Tsinghua University and Ministry of Ecology and
Environment 7
Green Belt and Road & Green PPP
Belt and Road， Green First
Five Elements
of Green PPP
Green
Facility
Green
Gov
Green
Mechanism
Green
Biz
Green
Tech