Special Purpose Vehicles –A Modality For Development With Inherent Risks

Special Purpose Vehicles (SPV) a catchphrase during the financial crisis of 2008 has assumed centre stage as companies and financial institutions scramble for monies in a contracted economy in the wake of the COVID-19 pandemic. Empirical and anecdotal evidence suggests that SPVs have served the development community and beneficiaries well from a historical standpoint. The key aspects of such SPVs, that led to their popularity, absorptive capacity, value for money, flexibility, bankruptcy proof, the ease with which multiparty funding can be handled, longevity, legitimacy, and other valuable characteristics. However, it remains to be examined is whether this scheme will stand the test of subsisting unprecedented times.