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Bangladesh PPP Programme: Infrastructure investment opportunities
Syed Afsor H. UddinCEO, PPP Authority
Prime Minister’s Office
20th April 2018Brussels
BIDA-DBCCI Investment and Trade Delegation-2018
Bangladesh Macro-Economic Overview
Mobilizing Private Sector for Development- BangladeshPage 2
▪ Area : 147,570 km2
▪ GDP : USD 249 billion (FY 2017)
▪ GDP Per Capita : USD 1544 (FY2017)
▪ GDP Growth : 7.28% (FY2017)
▪ Inflation : 5.7% (Dec 17, 12 month average)
▪ Forex. Reserve : USD 33 billion (Dec 2017)
▪ Rating: : Ba3/BB- stable (April/May 2017)
▪ Debt to GDP ratio: 27.2% (2016))
Bangladesh: Country Data
CDP-SAIS Workshop Feb 2018
Rapidly Increasing Foreign Exchange
Reserves
(2009-17)
Improving Debt to GDP ratio (2007-16)
Bangladesh 7th Five Year Plan (FY2016-2020)
7.4% $3.5bn 1.8%(GDP)
Annual average
growth
Public spending
on Infrastructure
ADP allocation on
Infrastructure
1.8%(GDP)
Target PPP
Targ
ets
Accelerating the Implementation of the PPP ProgrammePage 3 Secretaries & Agency Heads Seminar
$12.5bn
Target
Infrastructure
investment
3.8%(GDP)
Target ADP allocation
on Infrastructure
“To become a
middle income country by
2021
and a
developed country by 2041”
Building the Foundations for PPP (2012-2017)
Regulatory Environment
Institutional Framework
Capacity Enhancement
Project Bankability
Key Pillars to Delivering a PPP Program
Long term Financing
Bangladesh PPP
LawSeptember 2015
PPP Authority
Role
Investment Opportunities through PPP in BangladeshPage 4 Saudi Bangladesh Delegation
PPP Projects Pipeline
Procurement Contract Signed
* Estimated ** Approximately (Data as at Mar 2018) (excludes power sector PPP projects)
13 Projects
(US$2.0bn*)
11 Projects
(US$3bn**)
(including 1 project
under PSIG)
Project Development
11 Projects
(US$3.2bn*)
In Principle Approval
48 Projects
(US$15bn*)
7
17
3942 44 45
May 12 May 13 May 14 May 15 May 16 May 17
In Principle Approval(Number of Projects) 14
9
6
9
5
2
Tran
spo
rt
Hea
lth
&Ed
uca
tio
n
Tou
rism
Zon
e
Civ
ilA
cco
mo
d.
Uti
litie
s
PPP Projects by Sector (Number of Projects)
Accelerating the Implementation of the PPP ProgrammePage 5 Secretaries & Agency Heads Seminar
Meeting the PPP Investment Challenge
• Road Sector
• Port Sector
• Economic Zone
• Health Sector
• Road Sector
• Township
• Tourism Sector
• Health Sector
2015-16 2017 2018 2019 2020
$1.3bn(8 Projects)
$1.8bn (7 Projects)
• Road Sector
• Township
• Tourism Sector
• Health Sector
• Port Sector
• Industrial Sector
• Road Sector
• Port Sector
• Utilities
• Airport
• Health Sector
• ICT Sector
$1.6bn(13 Projects)
$3.6bn(10 Projects)
Forecast PPP Pipeline Contract Award
Accelerating the Implementation of the PPP ProgrammePage 6 Secretaries & Agency Heads Seminar
Meeting the PPP Investment Challenge – Power Generation Plan
2016 2017 2018 2019 2020
$0.5bn(27%)
$0.5bn(25%)
$2.2bn(50%)
$3.5bn(58%)
$4.2bn(61%)
5,200 MW
5,600 MW
7,000 MW
9,000 MW
11,000 MW
Private Sector Financing (% of total financing needs)
Private Sector Power Generation
12,500 MW
15,000 MW
18,000 MW
21,000 MW
24,500 MW
Total Installed Capacity
Mobilizing Private Sector for Development- BangladeshPage 7 CDP-SAIS Workshop Feb 2018
Regulatory Framework for PPPs
Bangladesh PPP
LawSeptember 2015
• Establishes separate regulatory framework for PPPs
• PPP Authority reports to Board of Governors headed by Hon Prime Minister
• Special incentives for PPPs permitted;
• Rights and obligations of investors governed by PPP Contracts
• Enables charging of levy for delivery of project services
• Dispute resolution clause encourages for out of court resolution
• Application of International laws and 3rd country venue permitted for arbitration
• Power to make rules, regulations, policies, guidelines etc. embedded
Mobilizing Private Sector for Development- BangladeshPage 8 CDP-SAIS Workshop Feb 2018
Procurement Guidelines for PPP
Feb 2018
Unsolicited Proposals Guideline
Feb 2018
TAF GuidelineJuly 2012
VGF GuidelineJuly 2012
G2G Partnership Policy
June 2017
Private Sector Power Gen. Policy
Oct 1996
Land Acquisition
Resettlement
Detailed Feasibility Study
Linked Project Delivery
Viability Gap
Financing Subsidy
Incentive Package
Long Term Financing Access
Investor Protection
Centralised Monitoring
PPP Authority Governance ArrangementGovernment Support for PPP Projects
PPP Program
Government will identify land requirement and acquire at own cost
Full technical, commercial and financial studies
carried out by internationally
appointed consultants to ensure
viability and bankability
Resettlement (if required ) will be done by Government after due consultation and necessary compensation
All linked projects (e.g. utilities shifting) will be
carried out by government at its own cost
PPP projects are centrally monitored to ensure constraints are pro-actively
addressed
Key clauses to protect investment
included in PPP Contracts
Access to financing from dedicated
Government owned banks
Incentives Package developed covering
financial benefits and regulatory support
(Where required) Government can provide additional financial subsidy
Investment Opportunities through PPP in BangladeshPage 9 Saudi Bangladesh Delegation
Unsolicited PPP Projects
Submit proposal (for bonus marks) & respond to
Authority’s invitation for bids
Sponsor/Investor (equity/mezzanine), Developer, Construction/ O&M Contractor,
Lender (debt, mezzanine)
Awarded PPP Projects
Direct negotiation with selected bidder / awarded
private partner
Investor (equity/ mezzanine), Lender (debt, mezzanine),
(Potentially - Construction/ O&M Sub-Contractor)
PPP projects under G2G Partnership
Policy
Appointed by G2G partner country to negotiate with
Authority
Sponsor/Investor (equity/mezzanine), Developer, Construction/ O&M Contractor,
Lender (debt, mezzanine)
Infrastructure Investment Vehicles
Funding agreements with State-owned Financial
institutions
Lender to Investment Vehicles(debt) – open portfolio or ring-fenced projects
Infrastructure Investment Opportunities
Mobilizing Private Sector for Development- BangladeshPage 10 CDP-SAIS Workshop Feb 2018
Solicited PPP Projects
Respond to Authority’s invitation for bids
Sponsor/Investor (equity/mezzanine), Developer, Construction/ O&M Contractor,
Lender (debt, mezzanine)
Modality Process Opportunity
• Bridge over Golachipariver
• Bridge of Arial Khan river• Road Expressway network
Selected List of Potential Projects
Railway
• High rise apartments at Purbachal
• Commercial development at Mohakhali
• Mirpur Integrated township• Textile mill re-development
Real estate and
townships
• Bay multipurpose terminal
• Payra port multipurpose terminal
• Core port infrastructure, Payra Port
Ports
• Kutubdia tourism park, Chittagong
• Re-development of Motel Upal, Cox’s Bazar
• Marine aquarium complex, Cox’s Bazar
Tourism and
hospitality
Road and
Bridges
• Railway hospital and college, Saidpur
• Railway hospital and college at Paksey, Pabna
• Health facilities, PayraPort
HealthOther areas …
Inland
waterway
Power and
energy
Logistics
Developing infrastructure in Partnership with SingaporePage 11
Contact Details:
PPP Authority (Prime Minister’s Office)
1st Floor,
NGO Bureau Building, Agargoan
Dhaka , Bangladesh
Tel: +88 02 5500 7413
Email: [email protected]