PPP: Description and methods for evaluating the returns

In this thesis we analyse Public – Private Partnership Starting from the understanding of the motivations and the organization of this kind of collaboration between public and private sector, we emphasise the features about risk allocation and financing system of this contracts, that are principally bear by private partners. After, we deal with valuation of Public – Private Partnerships where researchers have found a high peak in the level of the discount rate asked by the private partners to start the collaboration; otherwise, entrepreneurs would not have invested in the project. Then we argue that using some assessment methods that can incorporate some flexibility decisions of investors, such as Real Option Approaches, helps increasing the value of the project while decreasing the premium asked. In this way, the project can attract private partners not thanks to the risks’ reward but thanks to the guarantees implicit into the exercise of the real option inside of the PPP’s contract.