Foundation Examination Quiz

Questions and Answers

Contracts whose scope is only maintaining or operating infrastructure or a service can be regarded as PPPs in the broad sense if they transfer significant risks.

True

Which of the following statements about Multilateral Development Banks (MDBs) is correct?

MDBs provide financing usually on longer, not shorter, terms than commercial lenders. (correct)

MDBs provide support in identification and selection of projects.

MDBs may provide guarantee facilities against political risks.

MDBs provide policy advice to strengthen the policy and PPP framework.

Which of the following categories/instruments are correctly associated with their descriptions?

Grant financing compensates private partners for operating costs.

Miniperms are a type of equity financing.

Export Credit Agencies (ECAs) are sources of equity financing.

Initial Public Offerings (IPOs) are used to raise equity (capital shares). (correct)

Which describes a Special Purpose Vehicle (SPV)?

A company created specifically to sign and manage the PPP contract Signup and view all the answers

The Guide considers that an institutional PPP may only be regarded as a true private finance PPP when the [ ?] the project company.

private sector is significantly involved as an equity investor in Signup and view all the answers

What is the PPP process?

The steps that PPP projects proceed through in order for the project to be delivered Signup and view all the answers

Which type of social infrastructure asset is developed with PPP private finance?

Fire stations Signup and view all the answers

Which describes Common Law?

Generally uncodified with no comprehensive compilation of rules and statutes Signup and view all the answers

Which is an advantage for government of the project finance technique?

Lender oversight of the project is encouraged Signup and view all the answers

Which is an essential feature of a private finance PPP contract?

The private party bears significant risks Signup and view all the answers

Which of the following definitions of the Procurement Decision are true?

Both 1 and 2 are true Signup and view all the answers

How will having a legal system based on codified statutes influence the way a PPP framework is implemented in a country?

It will tend to be based on the law Signup and view all the answers

Which attributes must a contract for managing services or existing infrastructure contain for it to be regarded as a PPP?

1, 2, 3 Signup and view all the answers

Which is NOT a role undertaken by the Multilateral Development Banks?

Financing projects for shorter periods than commercial lenders Signup and view all the answers

Which is a source of equity finance for a project company?

Initial Public Offerings Signup and view all the answers

Study Notes

Foundation Examination Overview

50 multiple-choice questions with a time limit of 40 minutes.
Required to answer all questions and mark answers with a pencil on the provided grid.
Passing criterion is 25 correct answers.

Special Purpose Vehicle (SPV)

An SPV is specifically created to enter into and manage a Public-Private Partnership (PPP) contract.
Formed by a consortium of companies post-award of the contract.

Institutional PPP Definition

An institutional PPP is recognized as a true private finance PPP when the private sector significantly invests in equity.
Indicates substantial risk transfer and management responsibility to the private partner.

PPP Process Description

The PPP process involves steps to deliver projects, including identification, appraisal, structuring, and tendering.
Different from the broader PPP program which encompasses planning for future project development.

Fire stations are classified as social infrastructure assets developed through PPPs in the emergency response sector.

Common Law Characteristics

Common law is generally uncodified, relying primarily on judicial precedents rather than comprehensive legal statutes.

Project Finance Advantages for Government

In project finance, lenders have increased oversight and recover their loans based on project cash flows, which incentivizes due diligence.

Key Features of Private Finance PPP Contracts

A private finance PPP contract requires significant risk transfer to the private party and ongoing management responsibility.

Procurement Decision Definition

The Procurement Decision involves authoritatively proceeding with the procurement of a project, typically confirmed after the appraisal phase.

Legal System Influence on PPPs

A codified statute-based legal system tends to adopt a strict adherence to law in implementing PPP frameworks, as opposed to policy guidance.

Service Management Contracts as PPPs

Contracts for managing services or existing infrastructure should transfer significant risks and be performance-oriented to be considered true PPPs.

Role of Multilateral Development Banks (MDBs)

MDBs provide financing that typically spans longer durations than that of commercial lenders and offer policy advice for PPP frameworks.

Sources of Equity Financing

Initial Public Offerings (IPOs) serve as a method for raising equity capital for project companies, distinct from debt financing sources like Export Credit Agencies.

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Description

This quiz consists of 50 multiple choice questions designed to assess your foundational knowledge. You will have 40 minutes to complete the exam, and a minimum of 25 correct answers is required to pass. Ensure that you mark your answers clearly on the provided answer sheet.