Ministry of Finance: Standardize the construction and operation of existing PPP projects

The Ministry of Finance announced on August 20th that the General Office of the State Council forwarded the Ministry of Finance's "Guiding Opinions on Standardizing the Construction and Operation of Government and Social Capital Cooperation Existing Projects." The opinions require comprehensive development and security, adherence to problem-oriented, classified measures, cost reduction and efficiency improvement, standardization of the construction and operation of existing PPP projects, and support for improving the level of public services and livelihood security. It also requires safeguarding reasonable financing needs. In order to ensure the smooth construction of ongoing projects, the opinions require a classified and graded implementation. Local governments should prioritize the implementation of projects with certain profits based on economic and social development needs, project nature, and financial situation, and ensure the completion of the projects. Projects that have not started by the end of 2024 will generally no longer be implemented in the form of existing PPP projects. Meanwhile, reasonable financing needs should be guaranteed. Financial institutions should objectively evaluate and actively support the financing of ongoing projects in accordance with the principles of marketization and rule of law. For projects that have signed loan agreements, loans should be timely disbursed in accordance with loan conditions and controllable risks. For projects without signed loan agreements, reasonable credit conditions such as loan size, interest rate, term, and collateral should be determined based on thorough due diligence. Credit approval processes should be optimized, without arbitrarily terminating, and without requiring local governments or relevant departments to provide commitments or documents.