Valuation of Build, Own, Operate, And Share Transfer (Boot) Asset
The Build, Own, Operate, and Share Transfer (BOOT) model is a project financing mechanism commonly used in infrastructure and real estate development projects. Under this model, a private entity (often referred to as the “concessionaire”) is responsible for building, owning, and operating a project for a specified period before transferring ownership or operational control to the government or another party (usually a public authority or another private entity). The BOOT asset valuation process is crucial to ensure the project’s financial feasibility and sustainability for all parties involved
The valuation of assets under a BOOT model is complex because it involves evaluating both the construction phase (capital expenditures) and the operating phase (revenue generation and risk allocation), while also considering the future transfer of the asset.
