Procurement arrangements applicable to PPP contracts financed under World Bank projects Summary of guidance note

1. Procurement arrangements applicable to PPP contracts financed under World Bank projects Summary of guidance note OPCPR Mar. 2010

2. Information Note - PPP

3. Information Note - Contents

4. Implementation of a PPP project

5. PPP involves a series of contracts

6. Guidance Notes - Objectives

7. How is WBG associated with PPPs • IFC and IBRD provide advisory services to clients • IFC also participates by lending directly to the private sector investors • IBRD and IDA finance Output–Based Aid (OBA) subsidies, investments that are sovereign-guaranteed and consultants hired as transaction advisors • MIGA provides guarantees to government agencies Role of WBG in PPPs Advisory Services Investment lending Guarantees Direct Through hired consultants Non-sovereign guaranteed lending Sovereign guaranteed lending Equity Assets (Equipment/ Land) VGF/ Subsidies Loans to Financial Intermediary Guarantees IFC WB

8. PPP project preparation

9. Relevant provisions in GL Bank Procurement GL

10. Procurement Approach to PPPs

11. Applying Section I

12. Applying Section I (contd.)

13. Thinking points

14. Resources

15. Thank You!

16. Backup slides

17. Management & Lease contracts • Ownership of the assets continues with the public sector • Bank may be requested to finance a Management contract or the expansions and/or rehabilitation of the facilities • Under Bank GL similar to procurement of services and/or works • Should follow the Consultants Guidelines for Management contract and Section II of Bank procurement guidelines for expansion or rehabilitation

18. Concessions • Ownership of the assets is mixed for a period and is transferred to the public sector at the end of the contract, and investments are required and were part of the award of the concession • Bank may be requested to finance (or co-finance) e.g a BOT type contract, as part of the award of the concession (Bank GL para 3.13)

19. Greenfield Projects • Ownership of the new assets rests with the private sector and is transferred to the public sector at the end of the contract • Selection of the private partner is part of the award of the Greenfield project • Bank may be requested to finance (or co-finance) a BOT type contract, as part of the award of the concession(Bank GL para 3.13)

20. Divestitures • Private entity buys an equity stake in a state-owned asset or enterprise through an asset sale • Bank may be requested to finance government investments or new installations and expansions under responsibility of the private concessionaire • Bank GL para 3.13 – applicable if investments (either by the government or by the concessionaire) are part of the procurement process for divestiture • If investments are made some time after divestiture took place and an incumbent concessionaire is already in place, there are two possibilities: • Large investments on new facilities (like a ‘Greenfield’ project) - procurement of services and/or works • Expansion of existing network or system made by the incumbent concessionaire (not a ‘Greenfield’ project) – para 3.13 of GL

21. Concessions

22. Guarantees

23. Existing Incumbent Concessionaire

24. Divestitures

25. Background