Irish Schools: Sovereign Risk in Social Infrastructure PPP

Published 26 Nov 2012
Reference 5905
Region Europe
Length 21 page(s)
Language English
Prizes & Awards

Winner of 2012 EFMD Case Writing Competition, Finance and Banking Category


In 2009, a Macquarie consortium won the tender to build six Irish schools under a public-private partnership programme. The work was financed mainly with debt, with only €50,000 of straight equity injected into the project. Payments from the Irish government were the sole source of revenue. However, the advent of the sovereign debt crisis in Europe put the government's ability to pay in doubt.

Teaching objectives

The case study illustrates sovereign risk in PPPs, contrary to the assumptions usually made that the government will not default. Valuation of the project can also be discussed, particularly the use of subordinated debt as quasi-equity.

  • Q11213
  • school building
  • project finance
  • Irish schools
  • sovereign risk
  • public private partnership
  • Macquarie
  • debt crisis
  • European Competitiveness Initiative
  • European Competitiveness
  • Europe
  • Government and Policy