East African Community/US Workshop on Sustainable

Transport SystemsAugust 26-27, 2009

Public Private Infrastructure Advisory Facility

• Multi-donor facility • Established 1999• 16 Donors including USAID, MCC and AfDB• Managed by World Bank• Annual budget $30 million, Portfolio: $170 million• Average grant size of $225k, half less than $75k• Half resources utilized in Africa• Upstream policy and regulatory systems• PPPs, management contracts, and debt issuances

Public Private Infrastructure Advisory Facility

• Demand-driven model

• Approvals in 4 to 6 weeks

• Governance & Management Structure

• Application, approval and monitoring

• Focus on infrastructure, but includes utility/municipal financing

• Activities not tied to specific financiers or financing options

Ongoing Transport Activities in East Africa

• Rwanda: Debt Financing for Kigali Bus Terminal ($260,000)

• Tanzania: Dar es Salaam Bust Rapid Transit System ($75,000)

• Tanzania: Prefeasibility Study for PPP options for Kisarawe Freight Station ($330,000)

• Uganda: Bus Rapid Transit Conceptual Design ($280,000)

• Kenya: Debt Financing Options for Kenya Airport Authority ($275,000)

• Regional: Mtwara Cooridor PPP Development ($685,000)

• Regional: Core Strategic Transport and PPP Options for East/Southern Africa ($600,000)

Completed PPIAF Transport Studies in East Africa

• Ethiopia: PSP in Urban Transport through private operators ($250,000)

• Uganda: Multi Sector Transport Regulator Agency ($340,000)• Kenya : PPP Strategy for Kenya Airports ($325,000)• Kenya : Road Concessions ($543,000)• Kenya: Institutional Framework for privatization of Railways

Corporation ($393,000)• Tanzania : Implementation of PPPs in the road sector

($160,000)• Tanzania: Improving Airport Management through private sector

Participation ($230,000)

Financing the Infrastructure Backlog

US$bn. paover 10 years

CapitalCapital Expenditure Expenditure

Operating Operating expenditureexpenditure

TotalTotal

ICT 0.8 1.1 1.9

Irrigation 4.1 0.8 4.9

Power 23.2 19.4 42.6

Transport 10.7 9.6 20.3

WSS 2.7 7.3 10.0

Total 41.5 38.2 79.7Source AICDSource AICD

Types of Partnerships

• Debt instruments raising capital from private local or international markets

• Management contracts delegating service(s) to private partners

• Public Private Partnerships whereby public ownership is maintained but service delivery is contracted to private sector

Operation & Operation & Maintenance Maintenance contractcontract

Design Design BuildBuild

Design Design Build Build OperateOperate

Lease Lease Develop Develop OperateOperate

Buy BuildBuy BuildOperateOperate

Build Build Transfer Transfer OperateOperate

Build Build Operate Operate Transfer/ Transfer/ ConcessionConcession

Build Build OwnOwnOperateOperate

Roles, Skill Requirements, and Risks of Private SectorRoles, Skill Requirements, and Risks of Private Sector

LowLow

FullyFullyPublicPublic

FullyFullyPrivatePrivate

HighHigh

PPPs : Spectrum of Options

Opportunities and Partnerships

• Operating Expertise

• Enhanced Efficiencies

• Private Sector Capital (as appropriate)

• Long Term Financing (as appropriate)

• Capex Contribution (as appropriate)

• Reduce/Eliminate Forex Risk

• Definitive Public Sector Role

Challenges and Partnerships

• Clear Definition of Need and Scope

• Time

• Regulatory Environment

• Technical Capacity and Human Resources

• Capital Market

• Political and Economic Market

• Tenor

• Risk Allocation\Leveraging Private Resources

Partnerships and the Fiscal Crisis

• Flight to Quality

• Debt Markets Tightening (Interest Rates and Tenor)

• More Reliance on DFIs

• Increased Role of Local Private Operators and Investors

• Smaller is Better

• Strong, Transparent Regulatory Environments

PPIAF Contact Details

East and Southern Africa Office:

• Nairobi, Kenya

• www.ppiaf.org

• Telephone: +254-20-271-4095

• Contact: jkolker@worldbank.org

Africa Infrastructure Country Diagnostic

• http://infrastructureafrica.org