A comparison of Project Finance and the Forfeiting Model as financing forms for PPP projects in Germany

This paper compares Project Finance with the Forfeiting Model as the two basic forms that are used to finance Public Private Partnership projects in Germany. It describes the basic characteristics of both models in order to estimate their respective advantages and disadvantages from the public principal’s perspective. The economic feasibility study is presented as an instrument to choose the most efficient PPP financing form. It is used to compare idealised models of PPP financing variants. The comparison reveals the composition of the total costs and emphasises the close connection between financing costs and transferred risks. The research findings show that the economic feasibility study enables public decision makers to evaluate the total costs of a PPP project depending on the chosen financing form.