Five actions governments can take now to encourage private investment in infrastructure

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Of the 56 poorest countries, over half had no private investment in infrastructure in the past five years.  And in 2015, only 14 energy, transport and water projects involving private investment were concluded in that whole group of 56 countries—with all of them occurring in just eight of the countries. In the past five years, only one country – Bangladesh – has seen private investment in infrastructure each year.  Given that well-structured private infrastructure projects can bring a useful infusion of management (and sometimes money) to help provide better quality and access to infrastructure services, this seems like a missed opportunity. Here are five suggestions for actions that governments can take immediately to improve their chances of attracting good quality private management and financing for some infrastructure services.

1. Benchmark the PPP Procurement Environment. The recently-released World Bank Group’s Benchmarking PPP Procurement 2017 Report does this for 82 countries, scoring along four dimensions: preparation, procurement, contract management and unsolicited proposals. The methodology means that it’s easy to identify actions to improve the score.  If the country isn’t included, the methodology is shown, so it’s possible to score the country anyway. It is expected that this report will be expanded to cover more countries next year.

2. Ask development partners to assist with country diagnostics for private infrastructure, prioritizing potential infrastructure projects, improving disclosure, identifying the fiscal implications of PPPs and so on. All of these tools, and more, are shown on the PPP Knowledge Lab site.

3. List the details of potential infrastructure projects on the International Infrastructure Support System platform. This platform, developed by MDBs in conjunction with many private investors, identifies 200+ attributes for each potential infrastructure project. More projects are being uploaded each week. Well-prepared projects are much more likely to attract good quality investors.

4. Seek support for project preparation. One source is the Global Infrastructure Facility, which has nearly $100 million available to support governments to prepare infrastructure projects. Through the GIF, nine new projects have received approval in the past three months. The Global Infrastructure Facility is a collaborative platform that facilitates preparing and structuring complex PPPs in infrastructure  and mobilizing capital from the private sector and institutional investors.

5. Sign up government officials involved in PPP procurement for the PPP Certification course. This online course, supported by the MDBs, began taking applicants from around the world earlier this year. This will help to build a strong understanding of what’s involved in PPP procurement.

Taking these steps can help facilitate – but not guarantee – more private investment in infrastructure. There’s lots of scope for more.

 

Related Links

Authors

Laurence Carter

Senior Director, Public-Private Partnerships Group

Join the Conversation

owolabi moruf
October 06, 2016

Good

Isaac Atta Ampofo Senior
October 06, 2016

Isaac Ampofo I am a Ghanaian and i believe a massive research has to be undertaken to know more of which i am eager to partake in this exercise.
Please can i be part of all your research exercises because i am interested, i am in the field of information technology education. [REDACTED] Thanks and i welcome your response.

Nihar Ranjan Dash
October 15, 2016

Bench Marking Public Private Partnerships Procurement 2017 is a useful publication which can be used by Governments to strengthen their PPP environment to attract more Private Participation. However I would like to add one more assessment to Bench Marking i.e availability of diversity in funding mechanism and their robustness as in many economies only Banks, which are ill equipped to fund long term infra projects, have been the primary source of funding. Funding has been a major constraint.

genies alan
January 24, 2017

There are some interesting points in time in this article but I don’t know if I see all of them center to heart.
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