ECONOMIC NATURE OF GOVERNMENT GUARANTEES AND SUBSIDIES IN PPP FINANCING
DOI:
https://doi.org/10.5281/zenodo.19233147Keywords:
Public–Private Partnership (PPP), government guarantees, subsidies, financial support mechanisms, fiscal risk, contingent liabilities, infrastructure financing, risk allocation, investment attractiveness, public finance management.Abstract
Public–private partnership (PPP) projects have become a key instrument for infrastructure development and public service delivery worldwide. However, due to high capital intensity, long payback periods, and elevated risks, private sector participation often requires government support in the form of guarantees and subsidies. This article examines the economic nature of government guarantees and subsidies in PPP financing, analyzing their role in risk allocation, investment stimulation, and fiscal sustainability. The study highlights how properly designed financial support mechanisms can enhance project bankability while minimizing fiscal risks. The findings suggest that a balanced approach to guarantees and subsidies is essential to ensure both private sector participation and long-term public financial stability.
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