Build-Own-Operate-Transfer
USA
A type of public private partnership often used in project financing in which a government entity sells a concession to a private entity giving it the right to finance, design, construct, own and operate a project for a specified number of years. Depending on the project and its revenue stream, the concession term may range from ten to 99 years. At the end of the concession term, the project is typically sold to the government entity at fair market value or a pre-agreed price. Under this structure:
• The government receives an operational project that still has some residual value without incurring the expense associated with its design and construction. The government also received funds from the sale of the concession itself.
• The private entity recoups the price it paid for the concession, the project's financing costs plus a profit element through the fees it earns from operating the project during the concession period.
The BOOT structure is often used to build power stations, water treatment facilities and sewage facilities.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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