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PPI in developing countries in 2006

PPI in developing countries in 2006. Results from the PPI Project Database November 2007. A product of the World Bank and PPIAF. Investment commitments to PPI projects in developing countries in real and nominal terms, 1990-2006.

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PPI in developing countries in 2006

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  1. PPI in developing countries in 2006 Results from the PPI Project Database November 2007 A product of the World Bank and PPIAF

  2. Investment commitments to PPI projects in developing countries in real and nominal terms, 1990-2006 Investment commitments to infrastructure projects with private participation grew by 10% in 2006, to a level just 20% lower in real terms than the peak in 1997. 143 114 114 Total for US$1,090 billion in almost 3,800 projects Source: World Bank and PPIAF, PPI Project Database.

  3. Investment commitments to PPI projects in developing countries by form of investment, 1990-2006 Investment in physical assets drove the recovery in 2006. At US$91 billion, this investment returned to the peak of 1997 in real terms. Payments to the government declined but still exceeded the levels of 2001-04. 2006 US$ billions Source: World Bank and PPIAF, PPI Project Database.

  4. Investment commitments to PPI projects in developing countries by sector, 1990-2006 (1/2) • The picture varied across sectors: • Telecoms remained at peak levels in 2006, accounting for 55% of investment commitments. • Transport had a second year of strong growth, reaching a peak of US$30 billion. • Investment became less concentrated in 2006: the seven large projects (those over US$800 million) accounted for 35% of investment, down from 50% (for seven large projects) in 2005. • Energy remained in the US$16-20 billion range maintained since 2001. • Investment became more concentrated in 2006: the six large projects (those over US$800 million) accounted for 45% of investment, while the four large ones in 2005 accounted for 33%. • Water received investment commitments of US$2 billion, well below the peak but within the US$1–2 billion range of the previous five years.

  5. Investment commitments to PPI projects in developing countries by sector, 1990-2006 (2/2) 2006 US$ billions Source: World Bank and PPIAF, PPI Project Database.

  6. PPI projects in developing countries by sector, 1990-2006 The number of projects also showed a recovery in 2006, thanks to transport, which had its highest number of projects ever, and to some extent to telecoms. Energy projects remained at a stable level, though at only half the peak in 1997. And water projects were down slightly from the peak in 2005. Projects Source: World Bank and PPIAF, PPI Project Database.

  7. Investment commitments to energy projects with private participation in developing countries by subsector, 1990-2006 Electricity accounted for most investment commitments in the energy sector, but natural gas drove the small recovery in 2006. 2006 US$ billions Source: World Bank and PPIAF, PPI Project Database.

  8. Investment commitments to transport projects with private participation in developing countries by subsector, 1990-2006 Roads and railways drove the growth in transport investment in 2006. 2006 US$ billions Source: World Bank and PPIAF, PPI Project Database.

  9. Investment commitments and number of PPI projects in developing countries by sector, 1990-2006 • Why the divergence within sectors between trends in investment commitments and project numbers? Several factors explain it: • New projects in 2006 accounted for 48% (US$54 billion) of the investment commitments that year. Projects implemented in 1990-2005 accounted for the other 52%. • Telecoms accounted for most of the investment in previously implemented projects. New telecom projects in 2006 represented just 18% of the year’s investment commitments in that sector, while telecom projects closing in previous years accounted for 82%. • In transport the average project size in 2005-06 was twice that in 2002-04. • In energy, investment commitments in 2006 were sustained primarily by six large projects (those over US$800 million), which accounted for 45% of the year’s total for the sector. • In water new private activity focused on smaller projects.

  10. Investment commitments to PPI projects in developing countries by subsector, 1990-2000 and 2001-06 2001-06 1990-2000 Total: US$782 billion (2006 US$) Total: US$509 billion (2006 US$) Source: World Bank and PPIAF, PPI Project Database.

  11. Investment commitments to PPI projects in developing countries by region, 1990-2006 All developing regions saw growth in investment in 2006 except Europe and Central Asia, where investment declined from its peak in 2005, and East Asia, where investment remained stable. Investment has been more evenly distributed among developing regions since 2002. 2006 US$ billions Source: World Bank and PPIAF, PPI Project Database.

  12. Investment commitments to PPI projects in developing countries by region, excluding telecoms, 1990-2006 With telecoms excluded, investment trends across developing regions remained unchanged: Investment grew in 2006 in all regions except Europe and Central Asia and East Asia. And the distribution of investment across regions remained more evenly distributed than in the years before 2002. 2006 US$ billions Source: World Bank and PPIAF, PPI Project Database.

  13. PPI projects in developing countries by region, 1990-2006 South Asia and Latin America were the main drivers of the growth in the number of projects in 2006. Projects Source: World Bank and PPIAF, PPI Project Database.

  14. Investment commitments to PPI projects in developing countries by region, 1990-2000 and 2001-06 2001-06 1990-2000 Total: US$782 billion (2006 US$) Total: US$509 billion (2006 US$) Source: World Bank and PPIAF, PPI Project Database,

  15. Investment commitments to PPI projects in developing countries by project type, 1990-2006 Three main types of projects—greenfield projects, concessions, and divestitures—have driven the growth in investment commitments. 2006 US$ billions Source: World Bank and PPIAF, PPI Project Database.

  16. PPI projects in developing countries by type, 1990-2006 As in the previous three years, most of the new projects in 2006 were greenfield projects or concessions. Projects Source: World Bank and PPIAF, PPI Project Database.

  17. Investment commitments to PPI projects in developing countries by region and project type, 1990-2000 and 2001-06 Across regions, greenfield projects accounted for the largest share of investment commitments in 2001-06. The only exception was Europe and Central Asia, where divestitures still dominate. In most regions greenfield projects just increased their share of investment commitments. But in Latin America their predominance in 2001-06 represented a major shift from the 1990s, when divestitures accounted for most of the activity. 2006 US$ billions 2006 US$ billions Source: World Bank and PPIAF, PPI Project Database. Note: Includes projects reaching financial closure in 1990-2006. Source: World Bank and PPIAF, PPI Project Database.

  18. Investment commitments to PPI projects in developing countries by sector and project type, 1990-2000 and 2001-06 Greenfield projects accounted for the largest share of investment commitments across all infrastructure sectors in 2001-06 except water, where concessions remained predominant. In telecoms and transport the predominance of greenfield projects represented a major shift from the approach most common in the 1990s—in telecoms, from divestitures, and in transport, from concessions. In energy, by contrast, greenfield projects merely increased their share of investment. 2006 US$ billions 2006 US$ billions Source: World Bank and PPIAF, PPI Project Database. Note: Includes projects reaching financial closure in 1990-2006. Source: World Bank and PPIAF, PPI Project Database.

  19. Management and lease contracts in infrastructure in developing countries, 1990-2006 Management and lease contracts have become more frequent since the 1990s Percentage of all PPI projects Source: World Bank and PPIAF, PPI Project Database.

  20. Investment commitments to PPI projects by country income group, 1990-2006 In 2006 investment commitments grew in low-income and lower-middle-income countries but declined in upper-middle-income ones. 2006 US$ billions Source: World Bank and PPIAF, PPI Project Database. Note: Country income groups are based on the World Bank classification released in July 2006.

  21. Investment commitments to PPI projects as a percentage of GDP by country income group, 1990-2006 In the past few years investment commitments to PPI projects as a percentage of GDP have converged across middle income groups at around 0.8% while grew up to 1.8% in the low-income group. Percentage of GDP Source: World Bank and PPIAF, PPI Project Database. Note: Includes both investments in physical assets and payments to the government. Country income groups are based on the World Bank classification released in July 2006.

  22. Investment commitments to PPI projects as a percentage of GDP by country income group, excluding payments to the government, 1990-2006 Investment in physical assets as a share of GDP in 2001-06 ranged from 0.6% in lower-middle-income countries to 1.7% in low-income ones. Percentage of GDP Source: World Bank and PPIAF, PPI Project Database. Note: Includes only investment in physical assets. Country income groups are based on the World Bank classification released in July 2006.

  23. Investment commitments to PPI projects in developing countries by year of financial closure, 1990-2006 Since 2001 projects implemented in previous years have accounted for more than 50% of annual investment commitments. 2006 US$ billions Source: World Bank and PPIAF, PPI Project Database.

  24. Canceled or distressed PPI projects in developing countries, 1990-2006 Canceled or distressed projects remained a small share of total PPI activity by 2006. Most affected were Latin America and East Asia, followed by Sub-Saharan Africa. Among sectors, water remained the most affected. Source: World Bank and PPIAF, PPI Project Database.

  25. Methodological notes on the PPI Project Database • Data are reported on a commitment basis, not by disbursement. • The database includes only projects that have reached financial or contractual closure. • For management and lease contracts, a contract authorizing the commencement of management or lease service must exist. • For concessions and greenfield projects, financial closure is defined as the existence of a legally binding commitment of equity holders or debt financiers to provide or mobilize funding for the project. The funding must account for a significant part of the project cost, securing the construction of the facility. • For divestitures, the equity holders must have a legally binding commitment to acquire the assets of the facility. • Investments in infrastructure projects are classified as one of two types: • Investment in physical assets. The total cost of developing or expanding the facility during the contract period is entered as investment data in the year of financial closure. Privately run telecom projects and energy utilities are exceptions. For these, annual investments in facility expansion are entered in the year of the investment when information is publicly available. • Payments to the government—expenditures on government assets such as state-owned enterprises or rights to provide services in a specific area or to use radio spectrum. These include divestiture revenues, license fees, and canon payments. Where divestitures are phased, the investments are recorded in the years in which the transactions take place. • More information can be found at http://ppi.worldbank.org/

  26. PPI in developing countries in 2006 Results from the PPI Project Database November 2007 A product of the World Bank and PPIAF

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