The international infrastructure development and financing community has been watching the evolution of the private finance initiatives (PFIs) or public private partnerships (together with PFIs, collectively, PPPs) in Japan since its inception in 1999. Japan is a desirable jurisdiction for PPPs because of the quality of the government covenants, availability of local currency project debt financing and a modern legal system. However, the international business community has, for the most part, stayed away from Japanese PPPs because of local transaction structure issues and perceived non-tariff barriers to participation. The announcement in June 18, 2010 that the Government was planning to implement reforms to the PPP program in Japan caught the attention of the international business community and the debates have been followed with interest.
First published in Infrastructure Journal, April 27, 2011.