The guaranty-of-liabilities model for 'PFI' projects

The paper investigates the roles of public assistance for PFI (Private Finance Initiative) projects. In order to realize PFI projects, it is sometimes necessary for the public sectors to induce the private sectors to participate in the projects by giving financial assistance The guaranties-of-liabilities are the basic means for public sectors to share part of the financial risks with project companies. A guaranty-of-liabilities model is presented to investigate the efficient risk sharing schemes between the private and public sectors.