Responding to growing demand for infrastructure investment in Asia, the Asian Development Bank (ADB) has opened a new office that aims to provide governments with independent advice on shaping public-private partnerships.
Infrastructure investment is expected to reach $8 trillion till 2020 in Asia, and using the PPP model is one of the best ways to meet this massive need, “given the significant amount of private capital that is waiting to be deployed to well-structured and bankable deals,” said Ryuichi Kaga, head of the new PPP office.
ADB has provided PPP transaction advice on several infrastructure projects. They include the $1.3 billion Combined Heat and Power Plant 5 in Mongolia, the ongoing Lae Port, the largest port in Papua New Guinea, and the cross-border Turkmenistan-Afghanistan-Pakistan-India gas pipeline, it said in a statement.
ADB’s PPP transaction advisory service will help to ensure that ADB's client countries are able to bring to market bankable transactions. The new office will provide advice on project marketing, deal structuring, bid packaging and strategy so that governments are able to complete their transactions and achieve financial close.
The advice will not be tied to any ADB lending and would be provided on a fee basis.
The services will be distinct from the new office’s work in PPP advocacy, support for development of policy, legal, and regulatory frameworks to promote PPPs, and coordination of financing, it said.
ADB identified, in its Strategy 2020, the private sector as crucial to meeting Asia’s development needs. Apart from providing much-needed investment, the private sector can also help inject greater efficiency and innovation into infrastructure projects in the region. ADB has committed to having private sector operations and development account for 50 percent of its activities by the end of this decade.
ADB has longstanding relationships with developing member governments, development partners, banks, and companies operating in Asia. It also has extensive experience in assessing and financing large and small infrastructure and social projects in the region, involving both the public and private sectors.