Build operate transfer model as a toll of project finance and application of this model on İzmit municipal water supply project

IV ABSTRACT BUILD OOPERATE TRANSFER MODEL AS ATOOL OF PROJECT FINANCE AND APPLICATION OF THIS MODEL ON IZMIT MUNICIPAL WATER SUPPLY PROJECT Mehmet Başar Business Administration (Finance) Major Branch Anadolu University Graduate School of Social Sciences, 2000 Adviser: Prof. Dr. Doğan BAYAR Project finance is a concept relating to the financing of large infrastructure projects. This term refers to finance structures with limited recourse or non recourse and these structures have some common features; for example their financing is not primarily dependent on the credit support of the sponsors or the value of project's physical assets; they depend instead on the performance of the project itself. Thus as the source for the loan repayment, the cash flows and the earnings of the project are important for the lenders. And these projects can hence obtain financing and proceed only if they are technically and economically feasible. Another subject is to remember in project finance is that project risks are allocated among the parties. The number of parties involved in project financing may include the project sponsor, financial adviser, experts, project company, leasing companies, borrowers, banks, international agencies, goverment entity and insuring companies. However, project finance need not necessarily include all these parties. Build Operate Transfer (B.O.T.) is one of the most common used methods in project finance. This method has been used extensvely in infrastructure projects. In this technique, private sector entity (usually referred project company), to design, finance, build and operate the infrastructure projects for a given period. For private sector investors and financiers, BOT projects have opened up a whole new area of opportunities for new business and relatively high returns. BOT model is commonly used in financing and building of infrastructure projects in Turkey. Key Words: Project Finance, Infrastructure, Build Operate Transfer, Privatization