Potential for PPPs under WBIF

Potential for PPPs under WBIF
A presentation to the WBIF Steering
Committee
Berlin 11/12 June 2014
PPPs in the WBIF region: taking stock
• PPPs are useful tools for project delivery in WWBIF region,
potentially bringing additional skills and funding sources
• PPPs are no panacea to fiscal issues, especially when socioeconomic conditions make ability to pay and affordability key
concerns
• PPPS will probably procure no more than 5 to 10% of public
investment needs over time
PPPs in the WBIF region: taking stock
(2)
• Legal and institutional framework by and large in place in most
WBIF countries
• Some practical project experience in the region, mostly in energy
and transport, but implementation capabilities are still patchy
• Critical mass is a real issue:
•
Pipeline of approx. 40 projects of greatly varying nature, size and stages
of development (source EPEC)
•
No single country likely to have critical mass on its own
Summary of WBIF actions to-date
• IFI CO paper on Potential for Promoting PPPs for WBIF Task Force
(Q1 2014)
• EPEC commissioned to review policy, legal and institutional framework in WBIF countries and develop a Project Assessment Tool:
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•
•
•
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Croatia and Montenegro assessments available, Kosovo* and Serbia
assessments expected at end of June 2014
Regional summary report (covering also Albania, Bosnia Herzegovina
and FYROM) expected at end of June 2014
Project Readiness Assessment Tool : release expected end of June 2014
*This designation is without prejudice to positions on status, and is in line with UNSC 1244 and the ICJ
Opinion on the Kosovo Declaration of Independence
.
Parallel EC initiatives
• EUBEC Platform Technical Group 6: provision of guidance on
mobilising private sector resources, including through PPPs
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•
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First plenary meeting on 3 June
FI participants outlined need for flexibility, predictability and speed in private sector
initiatives
Work streams to report on progress in September
• Study on potential for EU BF support to PPPs
•
•
(May 2014 – KPC Dalberg)
Broader geographic remit than WBIF
Key recommendations include:
TA support to improve policy, legal and institutional framework
No need for specific financial instrument
Increase involvement of EDFIs in blending
Extend support services like EPEC or MED5P to other regions
Parallel EC initiatives
(2)
• PPP-Friendly Financial Regulation amendments (Dec 2013):
•
Recognition of PPPs in Regulation
•
Concept of Beneficiary broadened to accommodate PPPs
•
Flat rates grant calculation introduced
•
Flexible disbursements with escrow accounts to manage N+3 rule
•
Step-in rights now possible
Possible WBIF support to PPPs
•
IFI CO Paper highlights three main areas:
• Technical assistance to promote PPPs
• PPP Financial Assistance Facility
• Automatic Assessment of Potential to Attract Private Sector
Participation
Possible WBIF support to PPPs
•
(2)
Regional Capacity Building and Training Program:
•
Detailed needs will be assessed following completion of EPEC studies
•
Likely to target development of implementation capabilities and
harmonization of practices and documentation across the region to help
create critical mass
Individual project TA:
•
Essential component, no transaction = no experience
•
Polish experience shows extreme failure rates for projects without
advisory support
Possible WBIF support to PPPs
(3)
• PPP Financial Assistance Facility:
•
Some existing EU Funds blending experience in PPP projects: Maribor
WWTP (35mn – 20% grant); Poznan Waste to Energy (190mn – up to
45% grant); Pointe Noire Port (166mn – 2mn TA grant); Zambia Power
Project (273 mn – 7% grant) ; Ouarzazate Solar Plant (800mn – 4%
grant); etc. mostly with IFIs and bilaterals.
•
New PPP-friendly Financial Regulation: address lenders’ concerns,
review impact on operations of JGF and JLF
•
EUBEC TG6 guidance: available in H2 2014
•
Consider incremental benefits vs expected market size
Possible WBIF support to PPPs
(4)
• Automatic assessment of project potential:
•
Essential to detect potentially suitable projects prior to making decisions
impairing private sector participation
•
EPEC Project Readiness Assessment Tool available soon
•
Proposed simple analysis grid to detect candidate projects among less
advanced proposals (PPP “Tagging”)
•
Grid to cover 8 country or project specific criteria
•
Test run of Round 11 applications performed
Test assessment of Albanian Gas Master Plan Project
WB11-ALB-ENE-01 – Round 11
•
National PPP policy: Experience in private sector involvement in
infrastructure projects since 1996 covering energy, transport and
water sectors.
•
PPP framework: In place, above average in EE/CIS region
•
PPP commitment: Satisfactory
•
PPP experience and capacities: Some experience, primarily with
concessions but room for improvement and external advice often
required
Test assessment of Albanian Gas Master Plan Project
(2)
WB11-ALB-ENE-01 – Round 11
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Sector/project suitability: Private sector participation in gas
transport and distribution is common. 2007 World Bank study of
greenfield gas distribution projects found that private sector
participation and market liberalisation have coincided with
increased investment and an acceleration of projects. Economic
viability in the case of Albania remains to be validated.
Replicability: Limited by nature although Montenegro is carrying
out a similar study and Kosovo does not have a gas network.
FI support: tbc
Project status: early stage, many options open
Conclusion: Project potentially suitable for Private Sector
Participation and feasibility study should review options.
Summary results of Round 11 Proposals
Project
Assessment
Comment
ALB ENE 01
√
Good potential for PSP, early stage
BIH SOC 01
--
Size and advanced stage
KOS TRA 01
-
Size, interest in availability model?
KOS TRA 02
-
Size, interest in availability model?
MKD TRA 01
--
Advanced stage, difficult sector
SER SOC 01
--
Size and advanced stage
REG ENE 01
-
Implementation through public entity
REG SOC 01
--
Size, complex structure, large
investment grant
Next Steps
• Involve Task Force with further development of PSP/PPP
concepts for WBIF projects
• Continue coordination with IFIs and dedicated
bodies/institutions (TG6, EPEC, etc.)
• Development of comprehensive PPP concept for WBIF:
capacity building, documentation and practice
harmonisation, tagging and P.R.A. Tool, capital grants, etc.
• Presentation of PPP concept at next PFG/SC meeting

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