Healthcare Project Finance Investments in Italy with Public-Private Interactive Risk Sharing

Abstract

Ageing populations require larger healthcare facilities, in spite of growing public budget constraints, inducing to wonder whether we can afford what we increasingly need, accompanying sustainable and careful demography.

New healthcare infrastructural investments, compliant with Eurostat rules, may not be accounted as public debt increasing investments, if financed with project finance, transferring adequate risks to the private counterpart. There is so little wonder that project finance is increasingly popular in highly indebted countries as Italy.

Growing spreads due to recessionary credit crunch somewhat offset decreasing interest rates and leverage has unsurprisingly become more expensive and less popular, this being a back-to-the-earth lesson that both practitioners and academics are painfully starting to learn.

This paper contains original and comprehensive analysis of healthcare project finance risky trends, with practical insights and mitigating proposals.

Keywords: project finance, healthcare investments, risk sharing, concession period, contractual governance

JEL Classification: D61, D81, G32, H43, H54, L33