Structuring of Special Purpose Vehicle (SPV) Within the Scope of Public-Private Partnerships (PPPs) Under Latvian and Turkish Law

EasyChair Preprint 10040

Abstract

The establishment of a specific project company most commonly known as a Special Purpose/Project Vehicle (SPV) is a key feature of most PPP transactions in Turkey.
According to the competent authority, the SPV is considered to fall under the definition of a Securitisation Special Purpose Vehicle (SSPE) then it should not be considered a financial sector entity. In order to meet the increasing infrastructure needs of Turkey, it is generally accepted necessary to utilise alternative financing models to be provided with the participation of the private sector in addition to the use of public resources. In this framework, PPPs model, which has been widely used in realisation of infrastructure investments in developed and developing countries in recent years, is also applied in Turkey. PPPs model takes its legal root from art.47 of Turkish Constitution no.2709 and various legal regulations for PPPs have been adopted since 1980s. The private sector, which is one of the contracting party of the PPP model and entitled to participate as a tenderer in the tender in Turkey, is usually a business partnership which is legally evaluated as ordinary partnership. In Latvia an institutional PPP can be chosen in a case if the public partner wishes to have a stronger control over the execution of the PPP contract and participate in the administration of the established capital company, since both a public partner and a private partner jointly participate in the administration of an established joint venture. PPP risks, income and losses usually are shared in proportion to the shares of a public partner and a private partner that they have in a joint venture. Generally the SPV structured as a joint stock company. SPV is a feasible and an effective option for the lenders and financiers, who take into account the cash flow of the project and security over its assets for the repayments of the debts.

Keyphrases: Latvia, SPV, Turkey

@booklet{EasyChair:10040,
  author    = {Nikolajs Ozoliņš and Nesrin Akin},
  title     = {Structuring of Special Purpose Vehicle (SPV) Within the Scope of Public-Private Partnerships (PPPs) Under Latvian and Turkish Law},
  howpublished = {EasyChair Preprint 10040},
  year      = {EasyChair, 2023}}