8th ADB Business Opportunities Fair

Thematic Opportunities PPP

presentation by: Almaz Galiev
23 March 2017
 Public-Private Partnership and Business Opportunities
Huge need for infrastructure development
ADBs developing member countries want to deliver more infrastructure and they
are trying to do so through:
Conventional public investment: greater tax mobilization and/or borrowings,
Tapping private sector resources: public-private partnerships (PPPs)

Use of private sector resources is not merely

about financing
PPP deploys technical expertise and
efficiency
PPP is not a panacea
Careful preparation and implementation are
needed to achieve these advantages.
Partnership is the most important
Inviting the private sector The public sector
should become hands-off
PPP should be discussed as one of the methods to
deliver infrastructure services where public sector
undertaking remains critical
 What characterizes a PPP contract?
Investment into new / existing infrastructure
A PPP is a contract between a public sector and full operation by private sector
Private Risk profile: Flexible, but likely with
entity and private sector entity that
leverages the strengths of both parties by technical, financial, operational risks to
private sector
appropriately allocating risk between the Duration: 1550 years approx.
two for an extended period
Concession
Contract

Facility / operations management

Risk profile: Private sector receives fee Lease
Relative Risk

based on performance; private sector may Contract

have limited capital investment
Duration: 515 years approx.
Private sector fully responsible for
providing services and operational
Management
improvements
Contract Risk profile: Flexible; possible to give
revenue risk to private sector
Duration: 1030 years approx.
Service
Maintenance of assets
Contract Risk profile: private sector receives fee for
services
Duration: 15 years approx.

Ownership / Capital Investment

Private
PPP Operational Framework
Pillar 1 Pillar 2 Pillar 3 Pillar 4
Advocacy & capacity Enabling Project Project
development environment development financing

Knowledge PPP legislative

Preparation support
dissemination, training framework, tariff reform
Sovereign:
Loans & guarantees
PPP Units, planning & Project selection and
coordinate, budgeting, prioritization,
procurement feasibility studies

Non-Sovereign:
Transaction
Loans, equity &
Advisory Services
guarantees
PPP Operational Framework: Types of Support
Pillar 1 Pillar 2 Pillar 3 Pillar 4
Advocacy & capacity Enabling Project Project
development environment development financing

Various packages of support (staff, TA grant and loans) Sovereign Financing

from Regional Departments for: Viability Gap
Financing
Availability
PPP capacity development, payment support
policy reform, legal framework, Government equity
investment climate, project feasibility, participation
project selection and prioritization, PPP risk State-owned bank
management, project preparation. on-lending
Non-Sovereign
Financing
Long-term, local-
currency finance
Transaction
Advisory Services Guarantees, Credit
Enhancement
Intermediary/Fund

Asia Pacific Project Preparation Facility (AP3F)

PPP Operational Framework: ADB Departments
Pillar 1 Pillar 2 Pillar 3 Pillar 4
Advocacy & capacity Enabling Project Project
development environment development financing
Regional Departments
Knowledge PPP legislative
Preparation support
dissemination, training framework, tariff reform
Sovereign:
Loans & guarantees
PPP Units, planning & Project selection and
coordinate, budgeting, prioritization,
procurement feasibility studies

Non-Sovereign:
Transaction
Loans, equity &
Advisory Services
guarantees

OPPP:
OPPP PSOD
Coordination & Support

Asia Pacific Project Preparation Facility (AP3F)

Asia Pacific Project Preparation Facility (AP3F)
 Public-Private Partnership and Business Opportunities

Private sector roles are diverse and critical

Private sector

Consultants Investors Contractors Financiers

Policy advisory Equity Project design Loans

Project design Management Technology Guarantees
Transaction advisory Project development Equipment Insurance
Owners engineer Project management Services (operations
Project management Operations and maintenance)
Lenders engineer
Legal advisory
Financial advisory
Insurance advisory
 Contact information

Almaz Galiev
Principal PPP Specialist
Office of PublicPrivate Partnership

Tel: +63 (2) 632 4307

Email: agaliev@adb.org