Private participation in infrastructure (PPI) investments in International Development Association (IDA) countries totalled $7.9 billion across 35 projects in 17 countries in 2017, compared to $2.9 billion in 2016 across 18 projects in 10 countries, a report said.

IDA countries accounted for 8.5 per cent of total PPI investment in 2017, up from 4.3 per cent in 2016, said the report titled “Investments in IDA Countries Private Participation in Infrastructure  (PPI) 2013 – 2017” from World Bank.

Key takeaways:

•    Investment as a share of GDP is more significant for IDA countries.

In 2017, IDA countries received PPI investment equivalent to 0.8 per cent of their GDP, compared to non-IDA countries where  it  was  only  0.3  per cent.  The  cumulative  investment  share  over  the  last  five  years  was  also  higher for IDA countries.

• Myanmar, Lao PDR, and Cambodia accounted for 60 per cent of the 2017 IDA investments, compared  to  no  investments  in  these  countries  for  the  preceding  two  years.  For  Myanmar  and Cambodia,  this  was  only  the  second  and  third  time,  respectively,  in  the  last  10  years  that  either  country received any investments.

• Honduras,  Bangladesh,  and  Senegal  received  consistent  investment  in  all  five  years  and  collectively have the highest number of projects with PPI investments. Ghana had the highest level of cumulative investment in the five-year period from 2013 to 2017 equivalent to one-fifth of IDA totals during the period.

• In 2017, for the first time in 10 years, PPI projects were recorded in Afghanistan, Burkina Faso, Madagascar, and Samoa.

• As a sector, energy generation has been the key driver of PPI investments in IDA countries. Within energy, notable is the shift to renewables mirroring that in non-IDA countries.

• Renewable energy accounted for 70 per cent of all power projects in 2017, up from 38 per cent in 2013.

• Multilaterals and bilaterals are critical financing sources for these PPPs. Forty-two per cent of projects  in  IDA  countries  received  multilateral  financing  in  the  last  five  years  versus  13  per cent  for non-IDA countries. Similarly, 42 per cent of projects in IDA countries received financing from bilateral agencies, versus 7 per cent for non-IDA countries.

• Even before projects are financed, development agencies support project preparation in IDA countries. Six (of 35) projects of the 2017 IDA cohort benefited from project preparation donor support and three projects benefitted from IFC transaction advisory services.

• High proportion of directly negotiated projects.

Twenty-five per cent of projects in IDA countries  were  awarded  through  direct  negotiations  compared  to  10  per cent  in  non-IDA  countries  highlighting the need for strengthening competition, governance, and transparency.

• Investments are predominantly in greenfield infrastructure projects amounting to 79 per cent of the total investment in IDA countries over the past five years. – TradeArabia News Service