Development of motivational mechanisms for risk transfer in public-private partnership projects

Abstract

Subject. The article is devoted to the relations that arise between the State (public) partner and the private partner when distributing risks in public-private partnership (PPP) projects. Objectives. The study aims to establish features of motivation mechanisms designed to encourage private investors to accept the risks arising when making a PPP agreement. Methods. The basic research methodology is to determine the sensitivity of a private investor to certain types of risks based on systematization of motivation opportunities. The study employs content analysis and statistical data. Results. The paper identifies risk groups for which motivational incentives are applicable, and establishes standard motivational mechanisms. It notes that the formation of motivational mechanisms should consider key trends in the influence of the State on private investors. The areas that significantly influence the motivation of a private investor include, in particular, eliminating economic inequality of economic agents, opportunity to access innovation, solving social and environmental problems, creating a stable business environment and necessary infrastructure. Conclusions. Economic factors represent a key motivational element in risk allocation decisions, but they are not always completely dominant. Only a combination of individual and institutional measures can create an attractive environment for private investors considering the investment of their own capital in PPP projects. The findings can be used when concluding PPP project agreements at all levels, in accordance with the legislation on PPP, and ensuring the implementation of the proposed algorithm for the motivational mechanism formation.