The ADB backs PPP model with new financial products

The bank has created a financing facility, on a pilot five-year basis, that will help private concessionaries secure timely payments from the government.

The Asian Development Bank is launching a set of new products, including financing facilities that support PPPs and enable faster project preparation, to further accelerate infrastructure investment in its developing member countries.

One of the new products is the PPP standby financing facility, designed to support government payments to private PPP concessionaires, the ADB said in a statement.

“The facility has been introduced on a pilot five-year basis,” Allison Woodruff, a senior planning and policy specialist at the ADB, told Infrastructure Investor. “The government can withdraw funds from the facility when needed, such as during a cash shortage because of revenue fluctuation, to help concessionaires secure timely payments from the government.

“The facility can support PPP projects for which government has payment obligations for a long concession period, such as a toll road or a hospital. It can support one project or a bundle of projects in a country with a maximum duration of 15 years,” she added.

In a statement, the bank noted that many developing member countries have stressed the need for faster project preparation and implementation.

In response to that need, the ADB’s new project readiness financing facility will support project preparation and design activities in a faster and more responsive manner, the bank said. Approvals for the PRF facility will be delegated to ADB Management for an amount not exceeding $15 million.