The collapse of the inter-bank lending market has reduced the global liquidity availible, most banks, expecially those with limited deposit bases, have raised funds even on short maturities. Project finance and PPP lending are competing for scarce regulatory capital allocations with more attractive corporate opportunities. This is placing under pressure the viability of the current PPP model. However, the PPP market has not collapsed, there is only a high degree of selectivity on the side of banks and a general lack of consistency in the terms and conditions required by funders.
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