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Celebrating 20 Years Helping Countries Attract Infrastructure Investment

When the Public-Private Infrastructure Advisory Facility (PPIAF) was established in 1999, developing countries were only starting to bring in private investments in infrastructure (PPI) and only in a handful of countries. In recent years, finance for projects with private participation has totaled around $100 billion each year, nearly three times as much as in the past. PPI projects have also successfully closed in nearly 120 World Bank borrower countries to date.

This is no coincidence. When its founders—the World Bank Group and donor partners—established PPIAF, they had this mission in mind: assist governments in developing countries tap the full potential of private sector involvement in infrastructure. PPIAF provided early support developing the PPP laws and institutions in countries that are most active in the market today—Brazil, Indonesia, Nigeria, South Africa, and Turkey, to name a few.

PPIAF’s recipe for enabling private finance is simple. While many initiatives focus on structuring and financing infrastructure projects with private participation, PPIAF sets the stage to make this possible. For 20 years, PPIAF has supported a better investment climate by advising governments on how to establish the rules of the game and the system of governance for PPPs and other forms of private financing; and, by funding capacity building, knowledge, and data platforms on this topic.

Today, PPIAF is in places like Afghanistan, Burkina Faso, Ukraine, and the West Bank and Gaza, but the same recipe applies: help lay the foundations for future infrastructure sustainability—what we call the critical upstream. PPIAF is also in mature markets—this time helping governments tackle the second-generation challenges of scaling up private financing, such as the management of fiscal commitments and contingent liabilities; supporting the development of local currency financing mechanisms in support of PPI; and even helping governments direct PPI investments towards a specific agenda, such as renewable energy, climate resilience, and rural projects.

These are some of PPIAF’s results in the last 20 years:

  • $17.4 billion leveraged for infrastructure projects
  • 146 policies, laws, and regulations facilitated to improve enabling environments
  • 284 institutions strengthened
  • More than 19,000 officials trained to better manage infrastructure development projects
  • $973 million for infrastructure projects raised by sub-national entities with PPIAF support

It takes significant effort to close a first PPP. In 2018 two landmark PPPs financially closed: the Tibar Bay Port PPP—a first for Timor-Leste, one of the youngest countries in the world, and the Kigali Bulk Water project in Rwanda, considered the first water build-operate-transfer project in Sub-Saharan Africa. Before Tibar Bay Port or Kigali Bulk Water were even identified as projects, grants from PPIAF were already deployed, almost as a foundational ‘de-risking’ initiative.

Jemima T. Sy, PPIAF Program Manager explains, “We first advised governments on their options for financing infrastructure and catalyzed informed debate. Then, PPIAF strengthened the granting authorities to ensure they had the capacity to manage the process well and that the projects could not only attract private capital but also deliver socially beneficial services.”

She added, “A long-standing facility such as PPIAF is important because building institutions and strengthening capacity requires time and incremental support.”

Similarly, PPIAF is helping to strengthen the PPP institutions in Kenya. After helping Kenya enact a PPP law in 2013, PPIAF also worked to set up a functional PPP unit to champion the government’s infrastructure development agenda. Meanwhile, PPIAF’s Sub-National TA program supported a number of sub-national agencies on their financial management capacity, access to market-based financing, and enhancing their own revenues.

For all these reasons, PPIAF is unique among global partnerships. What’s in store for our next 20 years? Through the on-going support of our donors, we will continue to lay the groundwork for investments in climate resilient and inclusive infrastructure development that promotes economic activity, connects goods and people, and delivers services that improve the quality of day-to-day living in developing countries. All critical components for helping us reach the Sustainable Development Goals.

Why 20 Years of PPIAF Matters

 

 
 
 
1999PPIAF
PPIAF is Founded

PPIAF is established in the wake of the Asian Financial Crisis to strengthen the policy, regulatory, and institutional underpinnings of private participation in infrastructure in emerging markets. An initiative of the World Bank and the governments of Japan and the United Kingdom, PPIAF’s founding donors included the France, Norway, Switzerland, Sweden, the Netherlands, and USAID.

 

2000 Johannes Zielcke
Water Continues to Flow in Post-War Kosovo

A year after the UN establishes an Interim Administration in Kosovo, PPIAF gets to work—instituting a management contractor to operate the water utility in the Gjakovë-Rahovec region, where post-war outbreaks of water-borne illnesses and service interruptions cause concern. The contract allowed water to flow to 200,000 people and was extended for another term in 2005.

 
 
 
 
 
 
 2001 World Bank Photo
A Global Discourse on Output-Based Aid

The PPIAF-funded report, “Contracting for Public Services: Output-based Aid and Its Applications,” brings about a discussion on performance contracting and the channeling of public funds in a way that provides incentives for improving service to intended recipients. A few years after the publication of this report, the Global Partnership for Output-Based Aid is established (now called the Global Partnership for Results-Based Approaches).

2002 World Bank Photo
Transforming Telecommunications in Afghanistan

Following the installation of Afghanistan’s interim power-sharing government, PPIAF supports the development of a regulatory framework for the telecommunications sector, enabling the rebuilding of critical communications services in post-conflict Afghanistan.

 
 
 
 
 
 
2003 AFUR
Founding the African Forum for Utility Regulators

The African Forum for Utility Regulators (AFUR) is an association of 33 utility regulators focusing on issues related to the regulation of energy, telecommunications, transport, water and sanitation. In 2003, PPIAF supported its establishment and their first annual meeting where discussions drew from a survey of members’ experience on regulatory governance.

2004 World Bank Photo
Moving Around in Hanoi

Today, several of the hundreds of bus routes in Vietnam’s capital city of Hanoi are operated by private bus operators and competition keeps the state-owned operator efficient thanks to recommendations presented by PPIAF in 2004 to establish a route-by-route gross cost contract that is still used today.

 
 
 
 
 
 
2005 World Bank Photo
Entry of SMEs in Ghana’s Water Market

PPIAF supported Ghana to review the potential for a stronger and more productive role for local SMEs in small-town water service provision and to draft the necessary legal and advisory tools to strengthen the capacity of water boards to negotiate such contracts. Learn more about our toolkit for enabling SME participation in countries affected by fragility, conflict and violence (FCV).

 2006 World Bank Photo
GRIDLINES

PPIAF launches GRIDLINES, a series covering the latest thinking and emerging practices in infrastructure public-private partnerships.

 
 
 
 
 
 
 2007 World Bank Photo
SNTA Program Launches

PPIAF’s Sub-National Technical Assistance (SNTA) program improves the capacity of sub-national entities to access market-based financing for infrastructure investment and service delivery. Since 2007, SNTA’s $40 million advisory grants have helped raise $1.4 billion in sub-sovereign financing for infrastructure projects.

2008 World Bank Photo
Rise of Regional Players

In July 2008, Ho Chi Minh City awarded a five-year, performance-based, non-revenue water contract to the Philippines-based Manila Water Company, which had teamed up with the Vietnam-based Construction Technology Development JS Company to win the $15 million contract. Two PPIAF-funded activities were essential in ensuring the quality and success of the transaction.

 
 
 
 
 
 
2009 World Bank Photo
A Pioneering Transaction in Africa

PPIAF’s support to Senegal led to the construction of the Dakar–Dianiadio Toll Road, one of the first toll roads to be built in Sub-Saharan Africa outside of South Africa through a PPP.

2010 PT Penjaminam Infrastruktur Indonesia
Indonesia’s Infrastructure Guarantee Fund

With World Bank support, Indonesia developed the Independent Infrastructure Guarantee Fund to support the creditworthiness and quality of PPP infrastructure projects and lift key impediments to private investment. Following this, PPIAF advised Indonesia’s Ministry of Finance on the fund’s structure and its infrastructure risk management framework, and developed its method for estimating the fiscal cost of supporting PPPs.

 
 
 

 

 
 
 
2011 World Bank Photo
Colombia’s National Infrastructure Agency Mobilizes Billions for Roads

Colombia’s National Infrastructure Agency is established based on recommendations from PPIAF assistance to improve the planning, structuring, award, implementation, management, and regulation of road concessions.

2012 World Bank Photo
PPIAF Supports Kenya’s Lake Turkana Wind Farm

The Lake Turkana Wind Power project delivered its first power to the grid after PPIAF advised Kenya’s Power and Lighting Corporation on the structure of the power purchase agreement and other project agreements.

 
 
 
 
 
 
2013 World Bank Photo
Award of Al Minya Landfill Concession in West Bank

PPIAF grants supported IFC’s structuring of the PPP for the operation and maintenance of the Al-Minya landfill and two transfer stations in Hebron and Tarqoumiya in the West Bank.

2014 World Bank Photo
Integrating West African Economies PPP-wise

Regional integration, the only way that relatively small, mostly land-locked economies can hope to attract significant international interest and investment flow, is one of PPIAF’s thematic priorities in their 2014 strategy. PPIAF provided $9 million in support to regional integration projects in West Africa, which included regional PPP institutional and project financing assistance to the West African Economic and Monetary Union.

 
 
 
 
 
 
2015 World Bank Photo
The first 24/7 Water Service in India

Used well, PPIAF grants exemplify that a little can go a long way. With modest but expert-level inputs, PPIAF technical assistance helped prepare the pilot PPP in Karnataka, India that demonstrated service can be provided 24 hours a day, something no other city in India had been able to do before.

2016 World Bank Photo
Attracting PPPs in Countries with the Greatest Needs

In 2016, half of PPIAF’s new grants were focused in Sub Saharan Africa, 60 percent went to lowest-income countries, and one out of six were in fragile and conflict-affected countries.

 
 
 
 
 
 
2017 World Bank Photo
PPIAF Launches the Critical Upstream (PPIAF Strategy for 2018-2022)

On the back of strong results from its previous strategy, PPIAF launches the Critical Upstream, a 5-year strategy, which redefines the role of PPIAF faced with today’s challenges. It redoubles efforts on Sustainable Private Participation in Infrastructure (PPIs), creditworthy sub-national entities, and scaled delivery.

2018 World Bank Photo
Timor Leste’s First PPP

The Tibar Bay Port project achieved financial close marking the first PPP in the country’s history. Private financing was estimated to be at least five times larger than any previous private investment outside the oil and gas sector.

 
 
 
 
 
 
2019 World Bank Photo
PPIAF Looks to the Future – and the Future is Investible

Since its creation 20 years ago, PPIAF leveraged $17.4 billion for infrastructure by focusing on the critical upstream and is behind the creation of over 30 PPP units in emerging markets and developing countries. With World Bank Group and donor support, PPIAF’s future looks bright.