You are about to delete: .Confirm Deletion Cancel
Results Chart for Delivery Method and Financing
From Public (Government) Sources to Producers: The public funding partners for the project are Northern Health, the Peace River Regional Hospital District, and the Province of B.C.
Direct Cash Support: The financial agreement between Northern Health and the concessionaire replaces an agreement that would typically exist between a private sector concessionaire and senior bank lenders in a P3 contract. As a result of the volatile financial market and high risk in 2008, the owner is acting as the senior bank lender for the concessionaire to fund the upfront capital costs of the project. This agreement permits the owner to contribute funds up to 121.5 million CAD during construction for eligible costs incurred by the concessionaire. This will be paid out after the achievement of specific construction milestones. The Peace River Regional Hospital District is contributing 98 million CAD toward the project and financing costs that will be paid out monthly as construction progresses.
From Private Capital Markets Directly to Producers as Debt: All private sector debt is provided by the owner of the project to finance capital costs for design and construction.
From Producers as Equity: Typically, PPP projects executed under the Partnerships B.C. framework require no more than 10% equity financing from the private sector concessionaire. However, as a result of the global economic crisis at the time of procurement in 2008 for this project, the owner has allowed the concessionaire to finance approximately 20% of the project through equity, eliminating a more significant cost and risk associated with bank debt. In this wide-equity structure, a portion of payments made to the concessionaire (on its equity investment) are held until the last two years of the agreement to ensure they provide high levels of service throughout the entire 30-year term. Because of this, the owner has assumed the typical due diligence role of senior lenders applied during construction and operations.