ETHIOPIA: Advisory and Capacity Building Support on PPPs

In Ethiopia, PPIAF has supported strengthening the capacity building of the PPP Directorate General, and Ethiopian Road Agency to enable these agencies to identify, prepare and manage PPP projects and stakeholders. Ethiopia Electric Power and other contracting agencies are some of the agencies that stand to benefit from capacity-building activities delivered as part of this TA. The PPIAF support also included Ethiopia’s Railway Agency identifying opportunities for private sector participation in the rail sector, supporting the development of unsolicited proposal guidelines for the PPPDG, and developing a financial PPP viability report for the awash - miesso road section. The analysis in consideration of the combinations of fiscal incentives, revenue share, capital expense contribution, and resultant project IRRs and NPVs recommended a PPP for the development of the Awash-Mieso Project and specifically indicated that BOT and DFBOM models provide higher value for money in comparison to the base case PSC model. However, between the BOT and DFBOM models, the BOT model will require ERA to contribute substantially (60%) to the initial CAPEX required, and hence, if ERA funding is considered a constraint, the DFBOM model may be chosen.