The views expressed in this presentation are those of the author and do not necessarily represent those of the IMF or IMF policy.

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Outline

• Objectives

• Scope

• How does it work?

• Outcomes

• Next steps

Objectives

• Assess and quantify macro-fiscal implications of PPPs

• Provide a structured and guided process for collecting PPP project data relevant to determine its fiscal impact

• Measure potential deviations of national PPP reporting practices from international standards

• Potential users

– Ministries of finance, PPP units, country desk economists

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3

Scope

• Excel-based project tool o It can be used for projects of any size, but mainly for big projects

(or group of similar projects) with a significant macro implications

• Flexible accounting base o Consistent with international standards, it estimates fiscal impact

on a cash and accrual basis (cash statement, income statement, and balance sheet)

• Flexible coverage o Central government, sub-nationals, SOEs, etc.

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4. Additional support from government? Guarantees, subsidies, tax amnesties, upfront payments, etc.

3. Who ultimately pays for the asset? Government funded User-funded

2. Who controls the asset? Public sector Private partner

1. Who initiates the project? Central government, sub-nationals State-owned enterprises

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How does it work?

Outcomes

– Project cash flow for the whole project life-cycle

– Fiscal tables and charts (i.e., government cash statement, income statement and balance sheet)

– Long-term impact on deficit and debt (i.e., debt sustainability analysis with/without PPP projects)

– Sensitivity analysis • Macro variables: GDP, exchange rate, inflation • Project parameters: construction costs, funding

options, contingent liabilities

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Projected Cash flows of the PPP Project Company

Impact of PPP Project on Headline Fiscal Indicators

0

200

400

600

800

1000

1200

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Nonfinancial Assets

0

200

400

600

800

1,000

1,200Liabilities (Gross debt)

-250

-200

-150

-100

-50

0

50

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Overall Cash Balance

Cash surplus/deficit

-700

-600

-500

-400

-300

-200

-100

0

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Net Operating Banlance and Net Lending/Borrowing (accrual)

Net Operating Balance (change in net worth)

Net lending/borrowing (accrual overall balance)

-600

-500

-400

-300

-200

-100

0

100

200

300

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Inflows-Availability payments Inflows-Purchase agreement Inflows-User payments for services Outflows investment related

P-FRAM

Project summary data

8 S O d S l i l ff i

30.0

32.0

34.0

36.0

38.0

40.0

42.0

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Central Government Gross Debt with/without PPP Project(In percent of GDP)

Gross debt PPP debt

-6.0

-5.0

-4.0

-3.0

-2.0

-1.0

0.0

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Accrual Balance Indicators(In percent of GDP)

Overall balance (accrual)

Overall balance including PPP

-6.0

-5.0

-4.0

-3.0

-2.0

-1.0

0.0

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Cash Balance Indicators(In percent of GDP)

Cash balanceCash balance including PPP

P-FRAM Macro-fiscal impact

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P-FRAM Project shocks

30.0

32.0

34.0

36.0

38.0

40.0

42.0

44.0

46.0

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Central Gov. Gross Debt including PPP and Construction costs shock

(In percent of GDP)

Gross debt excluding PPPs (baseline)

Gross debt including PPPs

Gross debt with (+) shock on construction costs

-8.0

-7.0

-6.0

-5.0

-4.0

-3.0

-2.0

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Central Gov. Overall Balance including PPPs and Construction costs shock

(In percent of GDP)

Overall balance excluding PPPs (baseline)

Overall balance including PPPs

Overall balance with (+) inflation shock

Next steps

• Pilot of initial P-FRAM version underway • To evaluate selected projects across various sectors • To gather feedback from both strategic partners and

country authorities • Strengthen collaboration with other international

organizations to coordinate technical assistance efforts in PPP area

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