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ADB Support to PPPs and the example of the Partnership with
Government of India’s
PPP Initiatives
_______
22-23 September 2015 - Kathmandu Paolo Spantigati
Principal PPP Specialist
South Asia Regional Department
Asian Development Bank
1
OUTLINE
ADB Support to PPPs
PPPs advantages and challenges
ADB / DEA PPP Initiative
2
ADB Support to
Public Private
Partnerships (PPPs)
3
PPPs in ADB: Context
• Private Sector Development (PSD) (2008)
– Strategy 2020 states ADB’s plan to “scale up private sector
development and private sector operations in all operational
areas, reaching 50% of annual operations by 2020”.
• PPP Operational Plan (2012)
– Approved by Management in April 2012.
– PPP Community of Practice established in 2012
• PPPs Corporate Results (2012)
– Two PPP targets were set for operations via the Development
Effectiveness Review, whereby by end-2016:
Number of PPPs (Regional Departments): 50 PPPs
Leveraging ratio of ADB financing/support (Regional
Departments & PSOD): 8 to 1
PPP Operational Framework
Pillar 1
• Create awareness • Invoke leadership • Identify PPP potential in
sector planning and the private sector development agenda
• Develop capacity of government staff
• Enhance external knowledge management links
Pillar 2
• Develop policy, legal, regulatory, and institutional framework to facilitate, guide, and manage the development of PPPs (country and sector specific)
Pillar 3
• Align ADB project cycle to the PPP development process
• Assist in the development of pathfinder projects
• Provide support (including advisory support) throughout the process up to contract award/financial close which can come as expert support, toolkits, funding costs of transaction advisors, procurement support.
Pillar 4
• Provide credit enhancement products (e.g. equity, long term debt, refinancing subordinate debt, cofinancing, guarantees, etc.)
• Establish credit guarantee facility
• Provide public sector financial support through schemes such as viability gap funding, etc.
Advocacy and capacity development
Enabling environment
Project development Project financing
To date: What, where, how much technical assistance?
• From 1998 to 2014, 433 Technical Assistances with a total value of $572.38 million, with PPP components*
• South Asia and Southeast Asia received the highest amount of assistance while Regional TAs account for 39% of the total assistance.
• Top recipients are India (17%), Philippines (7%), Bangladesh (5%), Nepal (4%), PRC, Pakistan and Indonesia (2% each)
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20
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60
80
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No
. o
f T
A P
ro
jec
ts
Number of Technical Assistance Projects with PPP, 1998-2014
Pillar 3
Pillar 2
Pillar 10,0
20,0
40,0
60,0
80,0
100,0
120,0
140,0
160,0
180,0
200,0
220,0
Value of Technical Assistance Projects with PPP, 1998-2014
Pillar 3
Pillar 2
Pillar 1
* Standalone value of PPP activities cannot be quantified precisely due to data constraints.
US
D m
illi
on
s
To date: What, where, and how much project (loan) support?
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CWRD EARD PARD SARD SERD
Number of ADB projects with PPP Components, 1998–2014
Pillar 4
Pillar 3
Pillar 2
Pillar 1
• 296 projects (sovereign & non-sovereign) with actual and/or indicative PPP components
• Greatest amount of assistance* in South Asia & East Asia, particularly India (32%) & PRC (15%)
• Transport (31%) and energy (29%) sectors: biggest share of loan approvals with PPP components
0
5
10
15
20
25
2008 2009 2010 2011 2012 2013 2014
Number of ADB projects with PPP Components, 2008-2014
Pillar 1
Pillar 2
Pillar 3
Pillar 4
* Standalone value of PPP activities cannot be quantified precisely due to data constraints.
Public Private
Partnerships (PPPs)
Advantages and
Challenges
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PPPs: Some Advantages
Bring in private sector finances, expertise, new
technologies and efficiencies in development,
operation and maintenance leading to increase in
quality of public services delivered.
PPPs combine the advantages of both sectors:
Social responsibility, environmental awareness,
and accountability of the public sector.
finance, technology, managerial efficiency, and
entrepreneurial spirit of the private sector.
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PPPs: Some Key Challenges
Enabling policy/regulatory framework.
Financing: Long Term Equity & Debt
Credible, bankable infrastructure projects on
offer to private sector
Capacity in public institutions and officials to
manage PPP process (before, during, and after)
Capacity in the private sector : Developer/
investor and technical manpower.
Advocacy efforts to create greater acceptance of
PPPs by the public at large. 10
The ADB/DEA
PPP Initiative
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Building Capacity and Structuring
Projects
ADB has been supporting the GOI PPP initiative for
almost 10 years now
Set of 9 technical assistance projects, totaling an
outlay of USD 18.5 million. This is the largest such program in ADB
The approach has been three-pronged 1. Building capacity through creation of PPP Cells
2. Setting in place frameworks and documents to sustain
PPP
3. ‘Piloting’ projects in challenging sectors to create
‘proof of concept’ 12
The ADB/DEA PPP Initiative
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Technical Assistance Main Focus
TA 4890: Mainstreaming PPPs at State Level
Capacity building and Institutionalization support to State through PPP Cells.
Capacity building and Institutionalization support to DEA
PPP Cell for enabling assistance for Central PPP Schemes.
TA 4993 : Mainstreaming PPPs at Central Line Ministries
Capacity building and Institutionalization support to Central Line Ministry PPP cells for enabling assistance.
TA 7152: Preparing Pilot Projects Initiative
Providing project development funds for developing PPP projects in challenging sector.
TA 7221: Preparing Non Sovereign Urban Infra. Projects
Providing project development support for urban PPP projects
The ADB/DEA PPP Initiative
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Technical Assistance Main Focus
TA 7342: Provision of Urban Amenities in Rural Areas
Sector specific assistance for developing sector appropriate PPP schemes and pilot projects.
TA 7441-: Assisting Framework Development
Initialization support for development of policy inputs and guidance tools.
TA 7463: Sustaining GOI-ADB Initiative for Mainstreaming PPP
For providing further strengthening to PPP cells, mainly the DEA PPP Cell level.
TA 7625: Deepening Capacity Building on PPPs
To take on a further period of assistance to PPP cells earlier supported under TA 4890 and TA 4993 which were completing their respective tenure.
TA 8799: Supporting PPPs for Infrastructure Development
Supporting development and actual awarding of PPP projects at central (MOF) and State level (regional hubs)
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‘PPP Cells’ in 14 States, 4 Ministries & DEA, with PPP
and MIS experts embedded into nodal departments Assistance in policy, reviewing & structuring projects
Creation of databases
Large number capacity building programs
Over 200 capacity building, knowledge sharing workshops,
seminars and trainings, with almost 4,000 officials trained.
PPP X-Change: A bi-annual GOI-ADB workshop for
knowledge sharing and review
Achievements
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Empanelment of Transaction Advisors & Legal Advisors,
which has facilitated an open and competitive process
Key policy documents developed PPP Manual, PPP Compendium, Greenbook for PPPs in the
Health Sector, Business Plan for “3P India” (a new government
entity to support PPPs).
Achievements
17
Pilot Projects Over 20 ‘Pilot’ projects structured for bidding:
Water (NRW reduction): Madhya Pradesh,
Rajasthan, Maharashtra, Andhra Pradesh,
Karnataka, Goa, Lonavala
PURA
Health: Madhya Pradesh, Uttarakhand
Education: Rajasthan, Madhya Pradesh
Housing: Delhi
Renewable energy: Mizoram
Waste to Energy (Mumbai)
Food Silos
Urban Transport: Bangalore Metro (NSO loan)
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Challenges The challenging current situation for PPPs
The need for sustained momentum and interest by
local PPP projects’ sponsors (States, Ministries),
The necessary lead time to develop PPPs in
challenging sectors which at times conflicts with
the turnover in responsible officials;
The institutionalization of the cells on a sustainable
basis beyond the TAs.
The complex management of the support to many PPP
cells and multiplicity of pilots, contracts, and experts.
THANK YOU Paolo Spantigati
Principal PPP Specialist
South Asia Regional Department
Asian Development Bank
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