PPIAF: An Over view

Manila, September 2009

 Overview of PPIAF
• Public-Private Infrastructure Advisory Facility (PPIAF) is a global
multi-donor technical assistance facility managed by The World
Bank
– Established in 1999 – joint initiative of Japan, UK and WB
– Grants not loans
– Field offices in Manila, Delhi, Dakar and Nairobi

• Helps developing countries improve the quality of infrastructure

• Supports efforts of governments to realize the full potential of
private sector involvement in infrastructure
• Can finance a range of advisory and related activities in a single
country or across multiple countries
• Two windows: PPIAF Core Program and Sub-National Technical Assistance
PPIAF’s Donors
 PPIAF Core Program
• TA grants to support efforts of governments to realize the full
potential of private sector involvement in infrastructure
– Infrastructure strategies
– Designing and implementing reforms
– Building consensus
– Developing local capacity
– Pioneering transactions

• Identify, disseminate and promote best practices on PPP issues

• Annual budget of $20m; portfolio of approx $168m
• Average grant of $210,000 with half < $75,000
• Demand-driven model
 PPIAF Sub-National TA Program
• Launched July 2007; 3-year pilot
• $7m in first year (IFC, WB and DFID)
• TA grants to help Sub-Nationals access market-based finance
without sovereign guarantees
• Sub-Nationals: local government units, SOEs, utilities and DFIs
• Maintains traditional PPIAF characteristics:
– demand driven
– focus on infrastructure (but includes municipal financing)
– governance & management structure
– application, approval and monitoring
– not tied to specific financiers or financing options
 SNTA Key Characteristics
• Not PPPs or privatization
• Promotes market-based borrowing
– Improving creditworthiness helps mobilize infrastructure financing
– Also promotes local financial markets

• Purpose of the financing

– Infrastructure project investment
• Water & Sanitation, Energy, Transport
– Implementing development strategies
• City development strategies, slum upgrading strategies

• Clients can use own procurement rules

• No obligation to use a specific financing source
 Examples of activities under SNTA
• Improving internal financial controls

• Developing a capital financing plan

• Improving corporate governance of a public enterprise

• Getting or improving a credit rating

• Structuring a project

• Developing innovative credit structures

• Preparing a bond or share issuance

Activities in East
Asia and Pacific
 Infrastructure for Environment and
Resource Management
• Increasing urbanization
– Greater infrastructure needs
– Environmental and resource challenges affecting quality of life

• Improving infrastructure provision

– Efficient public transportation lessen emissions and improve air quality
– Efficient water delivery and waste water treatment protect and conserve water
resources
– Improved sanitation and proper solid waste management services benefit the
environment and quality of life

• Potential role of private sector in infrastructure financing and provision

VIETNAM: Ho Chi Minh City Metro
 Ho Chi Minh City (HCMC) faces rapid urbanization
and its accompanying challenges: worsened
congestion, road safety and air pollution
 A rail-based mass rapid transit (MRT) system key
component of HCMC’s transport strategy to meet
travel demand and improve livability
 PPIAF grant helped review the options for private
sector participation (PSP) and public–private
partnerships (PPP) for the HCMC Metro Rail System
Project
– Framework for PSP – implementation and operations
– Value-for-money analysis
– Financing model of a preferred PPP approach
– Stakeholder consultations, institutional and
contractual arrangements
 ADB-task managed
– Supplements an ADB Project Preparatory
Technical Assistance loan
PHILIPPINES: Solid Waste Management
Subsidy Framework
 Financing is one of the major reasons why there is low
compliance by LGUs with the Ecological Solid Waste
Management Act
 Some counterpart grant funding from the NG needed to help
LGUs undertake investment on solid waste management
services (e.g. Sanitary Landfill)
– Financing framework favors smaller and lower class LGUs but bulk
of the SWM problems are borne by highly urbanized cities
 PPIAF grant helped NEDA and the SWM Commission develop
an appropriate cost-sharing framework
– NG counterpart funds now allotted for 1st and 2nd Class Cities
(40% of investment cost)
– Additional counterpart funds can be shouldered by the NG if LGUs
form a cluster
 Framework adopted by Government and funds earmarked to
operationalize the cost-sharing framework
 Steps being taken by Government to prepare detailed
guidelines and criteria on accessing and use of the grant
funding
 Potential follow-on PPIAF support to help pilot the cost-sharing
arrangement
VIETNAM: Ho Chi Minh City Non-Revenue
Water Reduction PSP
 NRW a major issue for water utilities in developing
nations

 High NRW levels (av. 35%) affect financial viability of

utilities

 PPIAF support to identify options for reducing NRW in

HCMC
– Developed performance based contract (PBC) to reduce
water loss by 10% or 125,000 m3 in six years

– Overall utility management to remain with Saigon

Water Company (SAWACO)

 Follow-on activity to help SAWACO evaluate bids for

PBC
– Capacity building for SAWACO to ensure selects most
cost effective bidder with required technical capacity

– Competitive bidding with Manila Water successful (July

2008)

 Similar NRW reduction activity undertaken for Hanoi

PHILIPPINES: Small Water Utilities
Improvement and Financing Project
 Small Water Utilities (LGU-run, cooperatives) play
large role in providing water outside Metro Manila
 Part of a larger initiative undertaken by the Water
and Sanitation Program Philippines: Small Water
Utilities Improvement and Financing Project (SWIF)
– Improve performance, financial viability of small
utilities and support them to increasingly access
market-based financing in line with the Philippines
water sector financing policy

 With PPIAF-SNTA grant, consultants were hired to

assess financing needs and options for small water
utilities
– Rapid assessment reveals PFIs have little knowledge
of small water utilities' business; exhibited only
general and noncommittal interest
– Strengthening utilities' financial management
systems: Subsidiary account manual (to ring-fence
water business accounts) was piloted in Antequera,
Bohol

 Ring-fencing piloted by the Philippine Water

Revolving Fund (USAID) in 6 LGUs and 3
GLOBAL: Knowledge Products
GLOBAL: Urban Bus Toolkit
 Provides tools and options for reforming
urban bus systems
 Active dissemination and training seminars
bringing knowledge to practitioners and
policy-makers
 Expert-designed country/city specific
course material on practical aspects of
implementing public bus and BRT services
 Translation of material into local languages
(French, Chinese)
 Global delivery with presentations in 5
different regions
– Manila
– Bogota
– Rabat
– Washington, DC
– Ghana
Gridline: Organizing waste pickers to
enhance their impacts
 For urban poor in developing countries, waste picking is
one of the common ways to earn an income
– Vulnerable groups – recent migrants, unemployed, the
disabled, children and elderly
– Daily contact with all kinds of wastes – posing risks to their
health
 Organized waste picking can strengthen waste pickers’
welfare
– Bargaining position with industry and government
– Actors in the development process
– Grassroots development
 Also generates economic and environment benefits
– Broader source of income (waste pickers) and lower
recycling costs (municipalities)
– Contribute to national industrial competitiveness and
greater recycling
 Models for organizing waste pickers
– Micro enterprises
– Cooperatives - e.g. ASMARE and COOPAMARE in Brazil
– Public-private partnerships – e.g. in several Colombian
cities, the municipality provides infrastructure and
equipment while waste pickers provide labor
PPIAF Regional Office for
East Asia & Pacific (Manila):
manilarco@ppiaf.org

www.ppiaf.org