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Ramping up ADB support for PPPs in Asia. Michael Barrow Director Private Sector Infrastructure Finance Division 1. Mainstreaming PPPs. “scale up private sector development and private sector operations in all operational areas, reaching 50% of annual operations by 2020”. The PPP buzz. PPP.
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Ramping up ADB support for PPPs in Asia Michael Barrow Director Private Sector Infrastructure Finance Division 1 1
Mainstreaming PPPs • “scale up private sector development and private sector operations in all operational areas, reaching 50% of annual operations by 2020” 2
The PPP buzz PPP PPP PPP Budgetary constraints PPP PPP Efficiencies PPP PPP Project finance 3
…with real constraints • What bankers and investors identify as major missing elements for Asian PPPs: • “master planning” • “project preparation” • “fair bid processes” • “land” • “law / arbitration” • “leadership, consistency, staying power” • “lack of selectivity and good model projects” • “reasonable ambition” • “right risk balances” • “belief in private sector (and profit)” 5
…including in the private sector • banks? • capital markets? • investment? • structures and pricing? • new players? • deal flow? 6
…but overwhelming needs • $8,000,000,000,000 • $290,000,000,000 • $750,000,000,000 7
ADB Regional Department Thrusts ADB Private Sector Operation Thrusts ADB comprehensive approach to PPPs Enabling conditions PPPs Generate projects Finance projects 8
ADB’s PPP approaches • Multiple PPP teams • Information and coordination • MP3IC • PPP Days • training / workshops • ADB resources • Sector and project preparation – readiness for PS engagement • Countrywide approaches – the India example • State or city approaches • Pilots and projects 9
Why we are needed (more than ever?) • Our money • Others money • Political risk mitigation (‘halo’, guarantees…) • Structuring • Dependability 12
Innovation • Crisis response • the MDB club? • Combining and tailoring products • Increased exposure limits • PPPs and PPs 13
Expanding coverage • PSOD PPP financings currently in process: • Metro • MRT • BRT • Heavy rail • Roads • Ports • PPPs and PF deals for the first time in 8 countries this year • Infrastructure, country, sector funds • RE / CE/ EE initiatives • Airports • Water treatment • Waste water • Solid waste • Waste-to-power • Solar 14
ADB Private Sector Financing 2001-2009 US$ Million 15