Sharing Global Experience in Developing Bankable Transactions

Matt Bull, Senior Infrastructure Specialist at PPIAF, participated at a Consultation and Knowledge Exchange Event hosted by the World Bank and IFC in India on January 30, 2015. The event was attended by senior Government officials from 7 states in India and involved participation from different parts of the World Bank Group.

The objective of the Knowledge Exchange event was to facilitate sharing good practice between state governments in India while sharing international experiences in meeting some of the challenges faced by state highway PPPs. Some of the challenges discussed are dealing with public resistance to tolls, obtaining statutory clearances, preparing strong project business cases, and risk sharing. In sharing international experiences, case studies from Latin America and Europe were presented which engaged the participants in intense discussion on how these experiences could be translated to the Indian context.

With some 200 PPP projects estimated at $12billion in preparation in the state highways subsector in India, this engagement provided an opportunity to hear from a range of state level clients. The participants stressed the need for further assistance in the following areas:

•  Strategic Engagement on PPPs covering issues around affordability, fiscal commitments and contingent liabilities
•  Further analytical work on Bankability, Value for Money and Risk Transfer in PPPs
•  Life cycle analysis and engineering designs for whole life asset management
• International experience on how the above issues have been addressed in other countries

Among the presentations that were made, Matt Bull presented on the global challenges of structuring bankable transactions  using project finance which attracted significant interest from the participants.

A short video prepared by the World Bank team on the State Highways and PPPs technical assistance highlights some of the challenges the States face in managing PPP projects.