BuildOwnOperateTransfer

Build-Own-Operate (BOO) is a project delivery and financing model used primarily in infrastructure and energy sectors, where a private entity designs, builds, funds, owns, and operates a facility for a defined period. Under a BOO arrangement, the public authority typically pays for outputs or services rather than owning the asset, and ownership remains with the private sponsor for the concession term. The contract specifies performance standards, maintenance requirements, and payment mechanisms tied to availability or service levels.

Key characteristics of BOO include long-term commitments, risk transfer to the private operator for construction and operation, and regulatory oversight to ensure service quality and fair pricing. The private partner bears most of the financial and operating risks, subject to incentive structures and penalties tied to performance. Unlike some other PPP models, ownership of the asset generally does not automatically revert to the public sector at the end of the term.

BOO differs from Build-Own-Operate-Transfer (BOOT) and related models, where ownership or control may transfer to the public sector after a concession period. In BOO, ownership typically remains with the private owner unless a separate agreement provides for transfer.

Applications for BOO span energy generation, water and wastewater facilities, waste management plants, and certain transportation assets. The model can mobilize private capital and expertise but may raise concerns about long-term costs, accountability, and policy alignment if price regulation or public oversight is weak. Overall, BOO represents a private-sector-led approach to delivering and operating essential facilities within a clearly defined contractual framework.