PPI projects in the crisis

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A new note on Private Participation in Infrastructure indicates that PPI projects have been hit by the crisis but have rebounded somewhat:

Throughout the financial crisis, new private activity has continued to take place in developing countries with projects being tendered and brought to financial closure. In the first months of the full-scale of the financial crisis (Aug—Nov 2008), the rate of project closure was 26% lower than in the same period in 2007. However, since then private activity recovered and the project closure rate in Aug—Dec 2008 was just 15% lower than in the same period in the previous year.

What might explain this modest recovery? At least in two cases, governments and public sector banks have stepped in with additional financing. Brazil's government provided $US 42.6 billion for the national development bank BNDES to finance infrastructure projects, and India has likwise upped public support for infrastructure through IIFCL, a public infrastructure finance company.


Ryan Hahn

Operations Officer

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