43137 Helping to eliminate poverty and achieve sustainable development through public-private partnerships in infrastructure 2007 Annual Report Contents PPIAF at a glance 3 Message from the program manager 6 Overview of operations in 2007 11 DistributionofPPIAF-fundedactivities 11 OutcomesofPPIAF-fundedactivities 13 Regional and global activities in 2007 15 Sub-SaharanAfrica 15 MiddleEastandNorthAfrica 19 SouthAsia 21 CentralAsiaandEurope 25 EastAsiaandPacific 29 LatinAmericaandtheCaribbean 33 Globalknowledgemanagement 36 Outreachanddissemination 37 Finances and resource mobilization 40 Fundingandexpenditurestructure 40 Singleauditprocess 43 Annexes 1Governancestructure 45 2ActivitiesfundedbyPPIAFinfiscal2007 49 3Publicationsandresources 60 Acronyms and abbreviations 64 Notes 65 2007 Annual Report Helping to eliminate poverty and achieve sustainable development through public-private partnerships in infrastructure © 2008 The International Bank for Reconstruction and Development / The World Bank All rights reserved. The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the Public-Private Infrastructure Advisory Facility (PPIAF) or the Board of Executive Directors of the World Bank or the governments they represent. Neither PPIAF nor the World Bank guarantees the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of PPIAF or the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. The material in this work is copyrighted. Copyright is held by the World Bank on behalf of both the World Bank and PPIAF. No part of this work may be reproduced or transmit- ted in any form or by any means, electronic or mechanical, including copying, recording, or inclusion in any information storage and retrieval system, without the prior written permission of the World Bank. The World Bank encourages dissemination of its work and will normally grant permission promptly. For all other queries on rights and licenses, including subsidiary rights, please contact the Office of the Publisher, World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail pubrights@worldbank.org. Photo credits Cover from left: Dominic Sansoni, World Bank; iStockphoto; Gennadiy Ratushenko, World Bank; Yosef Hadar, World Bank; Eric Miller, World Bank; Dominic Sansoni, World Bank; Dominic Sansoni, World Bank; Peeter Viisimaa, iStockphoto. Inside front cover: Dominic Sansoni, World Bank. Text: Page 17, Yosef Hadar/World Bank; page 18; Kameel Virjee/Water and Sanitation Program--Africa; page 20, Dr. Safwat Abdel-Daim; page 22, Water and Sanitation Program--South Asia; page 23, Bernadette Nogueiro/PPIAF; page 27, Curt Carnemark/ World Bank; page 28, Asian Development Bank; page 30, Curt Carnemark; page 32, Otgonbayar Yadmaa; page 34, iStockphoto. PPIAF team photos: Deborah Campos, World Bank. PPIAF at a glance The Public-Private Infrastructure Advisory What support is available Facility (PPIAF) is a multidonor technical as- sistance facility that works with developing PPIAF can finance a range of advisory and re- countries to improve the quality of their infra- lated activities in a single country or across structure through public-private partnerships. multiple countries. These activities include the Launched in July 1999, PPIAF was developed following: as a joint initiative of the governments of Japan · Framing infrastructure development strate- and the United Kingdom, working closely with gies to take full advantage of the potential the World Bank. It was built on the World for private involvement Bank Group's Infrastructure Action Program · Building consensus on appropriate policy, and designed to reinforce the actions of all par- regulatory, and institutional reforms ticipating donors. · Designing and implementing specific policy, Today's PPIAF membership includes bilat- regulatory, and institutional reforms eral and multilateral development agencies and · Supporting the design and implementation international financial institutions. Owned and of pioneering projects and transactions directed by its participating donors, PPIAF is · Building government capacity to design and governed by a Program Council made up of execute private infrastructure arrangements representatives of these donors, and managed and regulate private service providers. by the World Bank through a Program Man- agement Unit. PPIAF support can facilitate public-private partnerships for financing, owning, operating, rehabilitating, maintaining, or managing eli- How PPIAF pursues its mission gible infrastructure services in a variety of sec- PPIAF helps developing countries improve their tors: roads, ports, airports, railways, electric- infrastructure through two main mechanisms: ity, telecommunications, solid waste, water and sewerage, and gas transmission and dis- · It offers governments technical assistance tribution. on strategies and measures they can use to Countries eligible for PPIAF-financed assis- tap the full potential of public-private part- tance are developing and transition economies nerships in infrastructure. as classified by the Development Assistance · It identifies, disseminates, and promotes Committee of the Organisation for Economic best practices on matters relating to public- Co-operation and Development. private partnerships in infrastructure. 3 How to apply for PPIAF support How PPIAF delivers services Applications for PPIAF support may come from any PPIAF-financed activities make extensive use of consul- source. For country-specific activities, however, the ben- tants, with procurement governed by World Bank guide- eficiary government must approve all requests for sup- lines. More information about procurement arrange- port. For multicountry activities designed to directly ben- ments and consultancy opportunities is available on the efit a small number of easily identifiable countries, the PPIAF Web site. relevant governments must also give written approval for the activity. How PPIAF ensures consistency An application form for PPIAF support can be down- with its mission loaded from the PPIAF Web site (http://www.ppiaf.org) or requested from the Program Management Unit. Pro- PPIAF requires that all activities it finances be consistent posals are assessed against the criteria specified in PPIAF's with its overarching objective of helping to eliminate charter, available on the PPIAF Web site or on request poverty and achieve sustainable development through from the Program Management Unit. private participation in infrastructure. 4 How to contact PPIAF PROGRAM MANAGEMENT UNIT WEST AND CENTRAL AFRICA c/o The World Bank MIDDLE EAST AND NORTH AFRICA 1818 H Street NW REGIONAL COORDINATION OFFICE Washington, DC 20433 15 avenue Nelson Mandela USA BP 475 Tel: (+1) 202 458 5588 Dakar, Senegal Fax: (+1) 202 522 7466 Tel: (+221) 33 849 4690 E-mail: ppiaf@ppiaf.org Fax: (+221) 33 823 2447 E-mail: dakarrco@ppiaf.org EAST AND SOUTHERN AFRICA REGIONAL SOUTH ASIA COORDINATION OFFICE CENTRAL ASIA AND EUROPE Kenya Re Towers REGIONAL COORDINATION OFFICE Upper Hill, P.O. Box 30577 50M, Shantipath Nairobi, Kenya Chanakyapuri Tel: (+254 20) 271 4095 New Delhi 110 021 Fax: (+254 20) 271 4275 India E-mail: nairobirco@ppiaf.org Tel: (+91 11) 411 77 801 (+91 11) 411 77 850 EAST ASIA AND PACIFIC Fax: (+91 11) 411 77 849 REGIONAL COORDINATION OFFICE E-mail: delhirco@ppiaf.org World Bank Office Manila Floor 23 Taiwpan Place F. Ortigas Jr. Rd., Ortigas Center Pasig City, Metro Manila Philippines Tel: (+63 2) 637 5855 (+63 2) 917 3000 Fax: (+63 2) 637 5870 E-mail: manilarco@ppiaf.org 5 Message from the program manager PPIAF continues to see strong demand for its In addition, we have substantially increased technical assistance grants as governments and our outreach efforts at both global and local the private sector reevaluate the risks and re- levels, holding consultations with private com- wards of public-private partnerships. In fiscal panies and civil society groups and awarding 2007 we approved 87 new activities in 36 grants to support such activities as stakeholder countries as well as our regional and global consultations and outreach and communica- portfolios. Africa remains a priority, with al- tion programs. most half our new commitments, though we Of particular note was the recent launch of continue to be actively engaged across the de- the new Sub-National Technical Assistance veloping world. Program, created to help subnational entities As our portfolio matures, earlier technical as- and publicly owned utilities build their credit- sistance activities continue to produce positive worthiness so they can access market-based fi- outcomes. From inception in 1999 to July 2007 nancing for infrastructure services. The pro- PPIAF supported the development of more than gram marks an important extension of PPIAF's 100 sector laws and reform strategies, assisted services, allowing us to assist well-performing in nearly 100 transactions, and strengthened public utilities in accessing additional private more than 50 institutions (see table 1, page 14).1 financing. New and existing donors will help PPIAF has also funded 269 training workshops finance this three-year pilot program. for government, the private sector, and civil so- ciety. And in accordance with guidance from the A changing landscape Program Council, we continue to strengthen the monitoring of our portfolio of ongoing and Private participation in infrastructure projects closed activities. in developing countries continued its resur- PPIAF is also supporting the development gence in 2006 (box 1).2 But the landscape is of a range of global knowledge products to changing. New private operators are engaging share experiences across regions as govern- with governments in more flexible, tailored ments explore new types of arrangements that contracts. And private activity is becoming suit their needs and are attractive to private op- more evenly distributed across regions and erators. Global activities completed this past country income groups. PPIAF continues to year include a Web portal on utility regulation, support governments as they explore innova- a toolkit on urban bus transport, and user's tive ways to improve and extend services with guides to risk mitigation instruments and proj- private partners. ect preparation facilities in Africa. 6 Box 1 Continued resurgence in private participation in infrastructure In 2006 developing countries saw new investment com- Investment in power has stabilized at modest levels, mitments to infrastructure projects with private participa- with 2006 commitments up slightly from the previous tion rise to nearly $114 billion (see figure). This develop- year's $16 billion. Greenfield power plant projects--or, as ment marked the third consecutive year of growth in new they are so often called, independent power producer commitments. (IPP) projects--continue to dominate the sector, account- Telecommunications again attracted the largest share, ing for 77 percent of investment. with $63 billion in new commitments. Cost recovery in Water and sanitation attracted $2 billion in new com- this sector is relatively common, competition easy to intro- mitments in 2006. The number of new water projects, duce, and broad benefits demonstrable to consumers though 20 percent lower than in 2005, was still among within a short time. the highest since 1995. Treatment plants accounted for Transport captured the second largest share, $30 bil- 33 of the 48 new contracts. Management and lease con- lion for 111 projects in 30 countries. Investment was up tracts accounted for 27 percent, a reflection of private by almost 20 percent from the previous year. Roads ac- operators' cautiousness about investing in the sector. counted for most of the activity, followed by airports and More data are available on the PPIAF Web site (http:// seaports. India, China, and South Africa accounted for www.ppiaf.org), under the Private Participation in Infra- about half the investments and half the projects. structure (PPI) Project Database. Investment commitments to infrastructure projects with private participation in developing countries by sector, 1990­2006 140 120 Total 100 80 billions$ 60 Telecommunications 2006 40 Transport 20 Energy Water & sanitation 0 1990 1995 2000 2006 Source: World Bank and PPIAF, PPI Project Database. Note: Adjusted by the 2006 U.S. consumer price index. 7 Risks redefined and reevaluated Implications for PPIAF Private companies are increasingly selective in their choice of sectors and countries, and new contractual arrange- Demand for PPIAF's technical assistance remains high: in ments show more risk-averse behavior by both the pri- fiscal 2007 PPIAF approved 87 new activities with a total vate sector and governments. Hybrid models of public- commitment of $17.4 million. The average size of the private partnership (PPP) are emerging, often involving grants was $200,000, and almost half were less than smaller and simpler contractual arrangements and blend- $75,000. Small grants remain popular with PPIAF clients ing public and private money to diversify risks. Some because they can be approved and implemented quickly. limit the private partner's risks significantly by restricting Support to Africa continues to be a priority. Nearly half its responsibilities to management. of PPIAF's funding was awarded to the region, with new The private companies on the top 10 list of project activities being funded in postconflict areas of West and sponsors are changing as well. Only 2 of the top 10 spon- Central Africa as well as in northern and southern Sudan. sors in the 1990s also appear among the top 10 for As developing countries redefine the risks and rewards 2001­05. And emerging market companies appear to be of public-private partnerships, PPIAF continues to be re- playing a larger role, claiming 6 spots on the top 10 list sponsive to their needs. for 2001­05, up from only 2 in the 1990s. China, India, and the Russian Federation are powerful new sources of Renewed importance of sector reforms investment, especially in Africa but also in many parts of Evidence of the private sector's growing discrimination in East Asia and Central Asia. taking on country and political risk underscores the con- PPIAF-supported research suggests that such emerging tinuing importance of PPIAF's traditional "upstream" market companies may be filling a gap left by the retreat focus on sector reforms and legal, regulatory, and institu- of traditional international investors. They may also be tional strengthening. taking advantage of new project arrangements that re- The value of upstream work is clear. Take the example quire smaller investment contributions from the private of private investments in greenfield projects involving partner. bulk power supply and guaranteed government off-take agreements. Such investments can help ease fiscal con- A balancing out of investment straints, but they will bring better services to consumers Data for 2006 on infrastructure projects with private par- only if the government has reformed sector policies and ticipation show a more even distribution of investment institutions to ensure efficient operation and serve the across the developing world. The share in upper-middle- public interest. income countries has remained about the same since 2001, Establishing credible and competent regulatory agen- and the share in lower-middle-income countries has de- cies is often difficult in developing countries. But regula- clined somewhat. But the share in low-income countries tion that is at least reasonably predictable and nonpoliti- has more than doubled, signaling growing interest in pri- cal can give private operators and financiers the comfort vate participation among the poorest countries. they need to make long-term investment commitments The distribution of investment across regions is also be- while at the same time protecting final consumers in non- coming more balanced. In 1990­2000 Latin America competitive markets. dominated, with nearly 50 percent of the total. East Asia followed, with 27 percent. But beginning in 2001 the other A need for flexibility regions began to catch up. By 2006 Central Asia and Eu- As the emerging hybrid project models increasingly blur rope had seen its share almost double, to 25 percent, sur- the traditional distinctions between public and private, passing East Asia. Meanwhile, the shares for South Asia PPIAF continues to be flexible and responsive to the and the Middle East and North Africa both more than changing landscape. PPIAF has supported innovative doubled, and Sub-Saharan Africa's quadrupled. partnership models, including a public-public manage- ment contract in Kenya, subdelegated management and 8 service contracts within a public utility model (Vietnam), private partnerships concluded in the 1990s in Latin and community-based projects involving local water pro- America and other regions have shown that pro-poor viders (Kenya, Vietnam). approaches need to be proactively built into sector poli- Other innovations center on the informal private sector. cies and regulations as well as the design of projects. The high priority placed on achieving the Millennium De- Otherwise the benefits may not reach the poor. velopment Goals is focusing new attention on small-scale To ensure that they do, potential low-income benefi- providers, which remain an important source of service for ciaries must be identified during the design of a project, the poorest groups in many low-income countries. and the benefits explicitly estimated, discussed with key PPIAF views all these arrangements as meriting sup- stakeholders, and then protected or facilitated during port as long as they provide cost-effective and sustainable implementation. Ensuring a strong poverty focus in work solutions for improving service delivery. with government clients, consultants, and colleagues at partner institutions remains an important priority for A push for sustainability PPIAF. As governments, particularly those in low-income coun- tries, gain a greater appreciation of both the benefits and Key priorities in program management the challenges of private participation, PPIAF is seeing increased interest in institutional solutions to ensure its This past year PPIAF continued to focus its efforts on sustainability--such as PPP units, project preparation fa- monitoring the impact of its activities and sharing knowl- cilities, and more varied models of regulation. edge across regions. PPIAF also made big strides in im- In response, PPIAF is funding work to support and proving outreach and dissemination around its global strengthen PPP units in Kenya, Malawi, Nigeria, South and regional knowledge. Africa, Uganda, and Zambia. In addition, it is sponsoring a methodological study focusing on mechanisms for Proactive monitoring of the portfolio managing financial risk in infrastructure projects in Indo- Through semiannual portfolio reviews PPIAF continues nesia. PPIAF has also recently published discussion pa- to track the implementation and outcomes of its activities pers on the critical success factors for PPP units and on to determine whether they are on target to achieve their ways to manage unsolicited proposals. (See annex 3 for a objectives. And the Program Management Unit continues list of PPIAF's publications.) to monitor completed activities to track emerging out- Upstream project development offers another area of comes. Locating a majority of PPIAF's staff in developing work as governments increasingly recognize that projects countries has played an important part in the sustained that are well developed and prepared are likely to result in monitoring of our growing portfolio. strong competitive responses from bidders and sustain- able implementation. PPIAF is responding selectively to Global research on lessons of experience requests from governments to assist with early-stage con- To build knowledge around public-private partnerships, ceptualization of projects with a high development impact PPIAF continues to emphasize global research on les- and close links to sector and institutional reform issues. sons learned as well as disseminating research results and communicating with all stakeholders. Several ac- A strong poverty focus tivities funded by PPIAF are evaluating the efficiency Governments and private operators increasingly recog- and poverty impacts of private infrastructure arrange- nize that public-private partnerships, even in the poorest ments with a view to collating good practices and draw- countries, are often developed without enough focus on ing lessons for the next generation of projects. Other poverty reduction. activities are tracking trends and developing best prac- A common assumption has been that a project to im- tices in regulation. In addition, new reports explore the prove infrastructure services in a poor country will au- use of low-discretion rules, hybrid models, and expert tomatically help reduce poverty. But reviews of public- panels in regulatory systems. 9 Broad outreach and dissemination At the Program Management Unit we welcomed To help broaden our reach and make information more Clemencia Torres de Mästle as the program leader for accessible, PPIAF launched a new quarterly newsletter in global knowledge for PPIAF. Clemencia will also over- the fall of 2006 and is developing a new and improved see PPIAF's Latin America and the Caribbean portfolio. Web site to be launched in 2008. In addition, in fiscal 2007 James Leigland joined us from our Nairobi office to we published 14 new Gridlines--short, user-friendly notes head up the Sub-National Technical Assistance Program summarizing the results of new research. And road shows in Washington, D.C. He is being replaced in Nairobi by with key partners have helped us reach out to new clients, Joel Kolker as PPIAF's regional program leader for East increasing awareness of PPIAF and its technical assistance and southern Africa. Another important new addition is grants. Tracey Miller, who has taken over PPIAF's growing port- folio of outreach and dissemination activities. New developments at PPIAF Looking ahead During this past year we were pleased to welcome two new donors to PPIAF's Program Council, the govern- In the coming year we look forward to moving ahead ment of Australia (AusAID) and the International Fi- with the new Sub-National Technical Assistance Program, nance Corporation. which extends our services to publicly owned enterprises We also welcomed several new members to the Techni- and subnational governments with significant responsibil- cal Advisory Panel--Anton Eberhard, Eduardo Engel, ity for the delivery of infrastructure services. This exciting and Robin Simpson. Meg Osius retired from the panel new initiative enables us to respond to an even wider after seven active years. Rosalind Thomas had to leave the range of institutional arrangements in infrastructure. panel to attend to her new responsibilities at the African Donor contributions continue to be strong, and we Development Bank as the director of the African Develop- thank our donors for their support. We also look forward ment Fund. Eduardo Engel will become the new chair, to continued outreach with all stakeholders--including and Dianne Rudo is joining as a new member. Another governments, the private sector, and civil society organi- new member, Valentine Chitalu, was appointed in late zations--on the role the private sector can play in helping 2007. A special thanks to outgoing chair Meg Osius for to meet the infrastructure needs in developing countries. her long service as a panel member and to Rosalind Thomas for her support. Jyoti Shukla PPIAF Program Manager Jyoti Shukla Before joining PPIAF in January 2004, Jyoti built up extensive experience at the World Bank in infrastructure strategies, regulatory reform, and private sector development and worked in China, India, and many countries of Latin America and the Caribbean. 10 Overview of operations in 2007 For the public and private sector alike, a key By country group constraint in solving infrastructure problems is Sub-Saharan Africa received nearly half of all the lack of an appropriate enabling environ- new commitments in fiscal 2007. Interest was ment--policies, laws, regulations, and institu- also strong in Central Asia and Europe (which tions--and the weak capacity of governments received 13 percent), though PPIAF remains se- to ensure that the solutions reach the poor. lective in its choice of projects in this region to PPIAF was created to address such constraints. maintain a strategic focus on priority regions. It helps developing countries expand and im- Demand from East and South Asia remained prove their infrastructure services through strong, with East Asia accounting for about 14 public-private partnerships (PPPs), funding ac- percent of new commitments and South Asia tivities across a range of eligible sectors: for 11 percent. Funding shares for both Latin America and the Caribbean (6 percent) and the · Water and sanitation--water, sewerage, and Middle East and North Africa (5 percent) were solid waste smaller in fiscal 2007 than in the previous year · Energy--electricity generation, transmis- to accommodate the increased commitments in sion, and distribution and natural gas trans- Africa (figure 1). mission and distribution The allocation of funding to the poorest coun- · Transport--roads, ports, airports, railways, tries increased substantially. PPIAF awarded $9.6 and urban transport million in new commitments (78 percent of the · Telecommunications. total for country-specific activities) to countries eligible to borrow from the International Devel- Distribution of PPIAF-funded opment Association--or IDA countries.3 Fund- activities ing for countries that borrow on nonconces- sional terms from the International Bank for PPIAF funding for projects in fiscal 2007 to- Reconstruction and Development (IBRD) taled $17.4 million and went to 36 countries as amounted to $2.9 million, down 17 percent well as to regional and global activities. Those from the previous fiscal year. The remaining considered for PPIAF assistance are developing funds ($4.9 million) went to non-country- and transition economies as classified by the specific (regional and global) activities. Development Assistance Committee of the Or- ganisation for Economic Co-operation and By sector Development (OECD). The largest share of PPIAF funding for new projects went to multisector activities, at 34 11 percent ($5.8 million; figure 2). These Figure 1 Distribution of PPIAF portfolio by region, fiscal 2006 and 2007 activities included support for devel- 9 oping PPP units and infrastructure 8 development funds and for building 2006 2007 7 regulatory capacity in individual 6 countries or through cross-border millions) 5 initiatives. ($ 4 The energy sector received the next 3 largest share of funding, at 23 percent Funding 2 ($4.2 million). New initiatives were 1 driven mainly by electricity projects in 0 Africa and East Asia. Sub-Saharan East Asia Central South Global Latin Middle East Telecommunications accounted Africa & Pacific Asia & Asia America & & North Europe Caribbean Africa for 14 percent of funding for new ac- tivities. PPIAF work in this sector re- mains focused on postconflict coun- tries and universal access schemes. Innovative and timely projects in Figure 2 Distribution of PPIAF portfolio by sector, fiscal 2006 and 2007 Haiti, Liberia, Sierra Leone, and Su- 9 dan are supporting regulatory and 8 infrastructure development. Two 2006 2007 7 projects in Indonesia and Sri Lanka 6 are helping the governments look at millions) 5 options for public-private partner- ($ 4 ships to develop backbone infrastruc- 3 ture. And PPIAF support in Pakistan Funding 2 is helping the government develop 1 and design a universal access scheme 0 to expand services to poor areas. Multisector Energy Transport Telecommunications Water & sanitation Transport activities, focused largely on highway and rural road management, accounted for 17 per- cent of new funding commitments. Water and sanitation projects re- Figure 3 Distribution of PPIAF portfolio by type of activity, fiscal 2007 ceived the smallest share of funding Capacity building at 12 percent. This share is signifi- Policy, regulatory & 13% cantly smaller than in earlier years, institutional reforms Consensus building 19% 2% reflecting global trends in the sector. Emerging best practices By type of activity Pioneering transactions 6% 10% In fiscal 2007 PPIAF again directed the largest share of its funding (50 percent) to support infrastructure de- velopment strategies (figure 3). The Infrastructure development strategies next largest shares went to support 50% 12 policy, regulatory, and institutional reforms (19 percent) Outcomes of PPIAF-funded activities and capacity building (13 percent). The share for pio- neering transactions increased in fiscal 2007 (to 10 per- With guidance from the Program Council, PPIAF uses cent), mostly as a result of a single large activity in Rwanda outcome indicators--such as transactions facilitated, involving legal advisory work for the Lake Kivu Power laws passed, institutions established or strengthened, and Project. sector strategies supported--for assessing the perfor- mance of the program (table 1). New in fiscal 2008 By the end of fiscal 2007 PPIAF had supported the In addition, a new pilot program, the Sub-National Tech- development of more than 100 sector laws and reform nical Assistance Program, extends the range of PPIAF's strategies, assisted in nearly 100 transactions, and services to include technical assistance to help subnational strengthened more than 50 institutions.4 Much sup- entities access financing for improving infrastructure ser- port has gone to capacity building and training, also a vices (box 2). priority. PPIAF has funded 269 training workshops for Box 2 Extending technical assistance to subnational entities At the start of fiscal 2008 PPIAF launched a three-year pi- · Obtain a credit rating or improve their rating from a lot, the Sub-National Technical Assistance Program, to help recognized credit rating agency subnational entities improve their creditworthiness so that · Take interim measures to enhance their creditworthi- they can access market-based financing. The aim is to help ness to potential lenders with a view to achieving one mobilize local capital for improvements in infrastructure of the above. services and promote the development of local financial The program will initially be financed by the U.K. De- markets. partment for International Development, the International The new program works with subnational govern- Finance Corporation (through its Funding Mechanism for ments--municipal, state, provincial, and other local and Technical Assistance and Advisory Services), and the World regional authorities--as well as publicly owned utilities Bank (through its Development Grant Facility). Funding and boards, funds, agencies, and authorities responsible for the first year is $7 million. for providing infrastructure services. Thus the program marks an important step forward for PPIAF, extending its James Leigland assistance to local authorities and public utilities with Team Leader for the new good operational and governance performance, enabling Sub-National Technical them to access additional financing to further improve Assistance Program their services. Technical assistance grants are provided on the same demand-driven basis as traditional PPIAF grants. The grants help recipients: · Access financing for infrastructure improvements from banks or bond markets without relying on sovereign guarantees 13 government, the private sector, and civil society. In addi- Table 1 Outcomes of PPIAF activities from inception tion, support to six regional regulatory forums provides through fiscal 2007 on-the-job training and peer learning for infrastructure Outcome Completed Pending Total regulators. Transactions facilitated 92 26 118 All PPIAF activities are reviewed and rated every six Regulatory institutions months through a comprehensive portfolio review. Ac- established or strengthened 43 13 56 tivities rated at risk or unsatisfactory are monitored more PPI laws and proactively. Upon conclusion, all activities are rated on regulations developed 32 15 47 implementation and achievement of development objec- PPI sector reform strategies supported 47 23 70 tives through sign-off sheets. In addition, the Program Management Unit continues to track the outcomes of Workshops 269 completed activities every year. Workshop attendees 20,168 The PPIAF team at a training session in 2007 From upper left: Joel Kolker, James Leigland, Paul Reddel, Herb Ladley, Njeri Gicheru, Lorenzo Bertolini, Bhavna Bhatia, Tracey Miller, Amit Burman, Emma Sorensson, Amsale Bumbaugh, Anupam Sharma, Jyoti Shukla, Patricia Roldan, Serah Njoroge, Bernadette Nogueiro, Maria Anton Butler, Hope Gerochi, Katia Nemes, and Clemencia Torres de Mästle 14 Regional and global activities in 2007 As public-private partnerships evolve, PPIAF Regional overview helps governments prepare the legal, regulato- Sub-Saharan Africa has seen substantial ry, and institutional framework to help them growth in private activity in infrastructure: deliver more and better services. From up- average annual investment in projects with stream preparation to time-sensitive problem private participation in 2001­06 was more solving, PPIAF aims to be responsive to each than twice the average of the 1990s. Still, in- country's needs. The following sections pro- vestment levels remain low and concentrated vide an overview of PPIAF's activities by region in telecommunications and in a few countries and its global knowledge portfolio, along with (such as Nigeria and South Africa). Private in- case studies highlighting some new projects vestment continues to represent only a small and project outcomes. part of the estimated $15 billion needed an- nually, over and above current investment lev- Sub-Saharan Africa els, to achieve the Millennium Development Goals by 2015. As a result, national govern- PPIAF continued its focus on Sub-Saharan Af- ments and regional entities--such as NEPAD, rica in fiscal 2007, directing nearly half of new the African Development Bank, and the re- funding commitments to the region. The 32 ac- gional economic communities--are redou- tivities awarded totaled $7.6 million, up from bling their efforts to promote investment in $6.6 million in 2006 and $4.4 million in 2005 infrastructure through innovative partner- (table 2). The largest share of funding for the ships between the public and private sectors. region went to multisector activities, followed The growing interest in private participa- by energy activities (figure 4). tion in infrastructure (PPI) extends to West and The continuing growth in PPIAF's Africa Central Africa, where some PPI initiatives are portfolio can be attributed in part to more ac- now advancing. This comes thanks to major tive outreach and dissemination of informa- regional investment programs such as the West tion from the two regional offices, in Nairobi, African Power Pool (WAPP), coordination by Kenya, and in Dakar, Senegal. Active partner- the Economic Community of West African ships--with the Infrastructure Consortium for States (ECOWAS), and the efforts by such re- Africa, the African Development Bank, the formers as Senegal. Progress also is being made New Partnership for Africa's Development in restoring good governance and creating the (NEPAD), regional economic communities, re- conditions for private infrastructure invest- gional power pools, and the African Business ment in postconflict countries such as Liberia Roundtable--leverage existing efforts to im- and Sierra Leone. prove and expand infrastructure services. 15 Table 2 PPIAF activities in Sub-Saharan Africa, ments have taken measures to ensure greater quality con- fiscal 2000­07 trol in project development, such as creating PPP units Fiscal year Number of activities Funding ($ millions) and developing or strengthening legal and regulatory 2000 15 3.54 frameworks. These reforms require state-of-the-art ad- 2001 21 6.62 vice as well as funding. Malawi, Nigeria, Uganda, and 2002 22 5.21 2003 19 4.33 Zambia are among the countries that have most recently 2004 15 3.15 begun to address this issue with PPIAF assistance. 2005 23 4.40 As African initiatives advance, the costs and complex- 2006 28 6.60 ities of project preparation have become increasingly ap- 2007 32 7.62 Total 175 41.47 parent. The challenge for governments is to prepare proj- ects to the point where private companies will begin investing their own money. The importance of upstream Figure 4 PPIAF funding for Sub-Saharan Africa preparation has been underscored by the experience of by sector, fiscal 2007 donor-supported preparation funds as well as facilities Water & sanitation established by regional development banks such as the Transport 7% African Development Bank and the Development Bank 7% of Southern Africa. Originally set up to focus on down- Telecommunications stream transactions, these facilities have recently seen 7% Energy 31% their mandates expanded so that they can address up- stream legal and regulatory obstacles as well. PPIAF is working in close collaboration with them. Key areas of PPIAF funding Multisector The growing interest in PPP projects in Africa has con- 48% tributed strongly to the continuing growth in PPIAF's Af- rica portfolio. Perhaps the most dramatic recent growth The new African initiatives in public-private partner- in PPIAF's technical assistance has been in West and Cen- ships are more varied than in the recent past. In East and tral Africa, where new support has gone to some post- southern Africa officials increasingly are opting for hybrid conflict countries. contracting models. These include management contracts for electricity distribution in Kenya, the commercialization Extendingsupporttopostconflictcountries or corporatization of water supply and sanitation utilities In fiscal 2007 PPIAF approved funding for its first activi- in Kenya and Uganda, and projects that mix public and ties in Liberia, Sierra Leone, and Guinea-Bissau--three private financing, such as the Ghana management contract countries emerging from protracted internal conflict. In for water supply and sanitation services (where the con- Liberia and Sierra Leone PPIAF is providing support on tractor advises on the use of an investment fund capitalized regulatory and licensing issues in telecommunications by donors). with the aim of enhancing the sustainability and poverty In West and Central Africa governments continue focus of sector reforms that paved the way for private to use French-style affermage contracts, which limit the sector involvement. Follow-up assistance is expected to investment-related risks for private partners. New con- consolidate these efforts in fiscal 2008. tracts are in place or under development for water in In Guinea-Bissau PPIAF is helping the government Cameroon and electricity in Burkina Faso, and a contract develop framework legislation on public-private part- for water was recently renewed in Senegal. nerships so as to increase transparency in the develop- Acutely aware of the mixed success of some types of ment of infrastructure reforms involving the private sec- PPP projects, in Africa and elsewhere, African govern- tor. The government is expected to request additional 16 support for downstream activities related to engaging the power system investment program of the Gambia private operators in ports and telecommunications. River Basin Organization and to strengthen regional reg- In Sudan simultaneous activities in the north and south ulation of the electricity market. are the first large PPIAF projects in that country. The as- sistance will help develop and harmonize the two regions' Supportinginnovativepublic-privatepartnerships telecommunications regulatory frameworks, something In Kenya PPIAF supported a study to assess the financial that is urgently needed as aggressive private operators at- feasibility of extending microcredit to small-scale local tempt to tie up lucrative contracts in the country. providers as a way of bringing water supply to rural and periurban areas. The study paved the way for water sup- Strengtheningregionalcoordination ply projects in 21 communities, supported by the Water PPIAF is also supporting regional organizations in West and Sanitation Program and the Global Partnership on and Central Africa that are involved in coordinating and Output-Based Aid (box 4). planning major infrastructure programs. With support from PPIAF, the WAPP Organization of public and pri- OtherPPIAFoutcomes vate electric utilities was officially launched in July 2006, A series of innovative activities round out the list of proj- and its business plan endorsed by its members (box 3). ects active in fiscal 2007: Together with such partners as the African Development · For the proposed Inga III power project in the Dem- Bank, the World Bank, and Agence Française de Dével- ocratic Republic of Congo--potentially among the oppement, PPIAF is also preparing assistance to support Box 3 Pooling energy sources in West Africa Faced with severe power shortages, member countries transparent, harmonized policy and regulatory framework of the Economic Community of West African States for the electricity sector in ECOWAS countries. (ECOWAS) came together to form the West African To support implementation of the WAPP program, the Power Pool (WAPP). This cooperative pooling mechanism World Bank approved a $350 million adaptable program integrates national power system operations into a uni- lending (APL) facility in 2007. Efforts are under way to fied regional electricity market. mobilize additional public and private resources. By harnessing untapped hydro and gas-fired power generation, developing power system interconnection, and facilitating cross-border trading, West African coun- tries expect to ensure reliable and affordable electricity supply in the region. To accelerate priority cross-border transmission projects and help mobilize resources from private and institutional investors, PPIAF is supporting the development of a blueprint for PPP transactions. Earlier PPIAF grants supported the institutional devel- opment of the WAPP Organization and the design of a 17 Box 4 Helping small water providers in Kenya access microfinance In Kenya many community-owned piped water systems PPIAF, along with the Water and Sanitation Program, are run on a commercial basis, with little support from the supported the design of the financing scheme. The Global government. To help pave the way for market-based lend- Partnership on Output-Based Aid is providing financial sup- ing to small water providers, PPIAF and partners launched port, allowing subsidies to cover 40 percent of the project a pilot project to build up business development services cost. The 21 subsidized systems will serve 60,000 people. to support them--such as business planning, construction management, access to markets, and audit features. Now under way in 21 communities, the pilot will iden- tify innovative instruments to make loans more accessible to small, community-owned piped water systems. Each community-based organization will also receive support from a business advisor whose services best fit its needs. Initial pilots have been approved by the participating mi- crofinance institution, Kenya's K-Rep Bank, and construc- tion was due to begin by the end of 2007. Citizens gather for a meeting on a community-managed water pilot project in Kabuku, outside Nairobi, Kenya. biggest energy projects in Africa--PPIAF funded in- dependent advice to help the government assess possible funding opportunities. · The PPIAF-funded Africa Infrastructure Country Di- agnostic Study continues to make progress in closing the gap in knowledge of infrastructure financing needs in Africa. The study will result in a series of thematic databases for at least 24 focus countries with data on fiscal costs, investment needs, and sector performance as well as georeferenced data on infrastructure net- works and demographic, economic, and environmen- tal indicators. (All outputs will be available on the Web at http://www.infrastructureafrica.org.) · Financial closure was achieved on the Kenya-Uganda Africa team, Dakar and Nairobi Rail Concession--one of the most ambitious rail Clockwise from bottom left: Emma Sorensson, Junior Professional concessions in African history--in part as a result of Officer (Nairobi); Serah Njoroge, Program Officer and Deputy Team PPIAF-supported upstream work on policy and regu- Leader (Nairobi); Lorenzo Bertolini, Regional Program Leader for West latory reforms in both countries. Credit enhance- and Central Africa (Dakar); Joel Kolker, Regional Program Leader for ments are still being negotiated for this project. East and Southern Africa (Nairobi); and Njeri Gicheru, Program Assistant (Nairobi) 18 Middle East and North Africa Table 3 PPIAF activities in the Middle East and North Africa, fiscal 2000­07 PPIAF approved five activities in the Middle East and Fiscal year Number of activities Funding ($ millions) North Africa in fiscal 2007, for total funding of 2000 3 0.20 $822,528--upfrom$797,700infiscal2006and$440,000 2001 3 0.70 in fiscal 2005 (table 3). The largest shares of funding went 2002 0 0 to activities in the transport (54 percent) and water (37 2003 3 0.27 percent) sectors, while the share for energy-related activi- 2004 6 0.81 2005 1 0.44 ties dropped sharply, from 56 percent in fiscal 2006 to 9 2006 6 0.80 percent in fiscal 2007 (figure 5). 2007 5 0.82 The new activities are concentrated in a few countries. Total 27 4.05 Funding was directed mainly to the preparation of up- stream infrastructure development strategies (46 percent) and capacity building (45 percent), with a small share for Figure 5 PPIAF funding for the Middle East the preparation of policy, regulatory, and institutional re- and North Africa by sector, fiscal 2007 forms (9 percent). Energy 9% Regional overview Water & sanitation In 2006 investment in private infrastructure projects in the 37% Middle East and North Africa amounted to $11 billion, the highest level in 1990­2006 and up 50 percent from 2004 and 2005. But the private activity remained concen- trated by sector and country. Most of the investment went to telecommunications projects ($8.1 billion), with the Arab Republic of Egypt awarding a new mobile license Transport and Tunisia privatizing the incumbent operator. Much of 54% the rest went to the energy sector ($2.3 billion), largely to two transactions in Algeria, the Medgaz gas pipeline and the Shariket Kharaba gas-fired power plant. PPIAF funding also helped organize a workshop on building institutional and technical capacity for gas de- Key areas of PPIAF funding velopment in the Republic of Yemen. Held in November Demand for PPIAF technical assistance is likely to remain 2006 and jointly organized by the Ministry of Oil and limited and concentrated in a few countries. Even so, Minerals and the World Bank, the workshop drew more PPIAF continues to serve as a valuable resource for gov- than 60 participants from the government and leading ernments considering infrastructure reforms, and it will private investors. The event was followed by finalization strengthen its efforts in disseminating emerging lessons of terms of reference for developing the structure of the and international best practices in the region. gas market and identifying ways to finance the required In fiscal 2007 the Republic of Yemen received support gas transport infrastructure. from PPIAF for the first time. The support went to three In addition, PPIAF is funding an activity to identify activities. In the road sector, in response to a request from suitable contractual arrangements for the delivery of wa- the Ministry of Public Works and Highways, PPIAF is ter and sanitation services in major cities. Funding will supporting a diagnostic study toward establishing public- support consultations with stakeholders and the develop- private partnerships for the management or implementa- ment of a communication program, help build the capac- tion of major projects. The study will also identify finan- ity of government authorities to manage stakeholder cial, legal, and institutional arrangements for achieving communications, and support advisors to help pilot the sustainable public-private partnerships. approach chosen. 19 Box 5 Overcoming water shortages in Egypt Egyptian farmers in the West Delta Region of the lower Nile The government secured funding of $175 million from Basin face water shortages that threaten their productivity. donors ($150 million from the World Bank and $25 mil- To overcome these shortages, the government of Egypt re- lion from Agence Française de Développement) to cover quested PPIAF funding to help identify practical ways to about 85 percent of the cost of constructing the initial partner with the private sector in the design, operation, and phase of the system, which will serve about 38,000 hect- even financing of a new surface water irrigation system. A ares. The private operator will be responsible for mobiliz- second aim was to develop a regulatory framework for a ing the other 15 percent of the funding as well as any fi- design-build-lease transaction for the system. nancing required for expanding the system throughout The results: a pioneering hybrid scheme that is intro- the concession area. ducing important reforms in the sector, and new ap- proaches in project development, transaction design, and public-private partnership. Once completed, the system will provide access to surface water irrigation over an area of about 75,000 hectares in a region threatened by groundwater deple- tion. The 30-year design-build-operate concession will rely fully on cost recovery, with no budgetary subsidies from the government. In Morocco, in coordination with the World Bank, the West Delta Region (box 5). The aim is to develop a PPIAF supported the organization of a seminar on con- surface water irrigation system for highly productive com- tractual relations between operators in the electricity sec- mercial and small farms in an area threatened by water tor. The seminar, which drew on international experience, shortages. was held in Casablanca in February 2007 under the aegis PPIAF support is also assisting the government of of the prime minister. The seminar gave sector stakehold- Egypt in implementing its PPP program. In fiscal 2007 ers (government authorities, producers, consumers) an PPIAF assistance focused on developing a transaction ap- opportunity to discuss the transition to the liberalized proach for public-private partnerships in the water sector electricity market envisaged in a draft electricity law pre- in New Cairo and implementing pilot performance-based pared by the government in the fall of 2006. contracts for road maintenance. Additional assistance In Egypt upstream work completed in 2005­06 with has been requested to support the development of Egypt's PPIAF support is now leading to the development of an central PPP unit and help build the capacity needed to innovative project that will involve the private sector in design, implement, and monitor PPP projects within a designing, operating, and financing an irrigation system in sound and transparent institutional framework. 20 South Asia Table 4 PPIAF activities in South Asia, fiscal 2000­07 Fiscal year Number of activities Funding ($ millions) South Asia showed continued demand for PPIAF's tech- nical assistance grants in fiscal 2007. Thirteen new ac- 2000 13 2.65 2001 7 1.54 tivities were awarded, with funding commitments of 2002 8 1.24 $1.97 million (table 4). Much of the support went to In- 2003 8 2.40 dia and Pakistan to assist government initiatives to in- 2004 3 1.15 crease private involvement in infrastructure provision. 2005 7 1.10 2006 13 2.48 Nearly half the funding went to multisector activities to 2007 13 1.97 help strengthen policy, legal, and regulatory frameworks Total 72 14.53 (figure 6). Energy and telecommunications each captured 25 percent of funding for activities, while transport and water and sanitation received small shares. Figure 6 PPIAF funding for South Asia by sector, fiscal 2007 Regional overview Transport Water & sanitation The strong interest in PPIAF funding in South Asia re- 4% 3% flects the growth in private participation in infrastructure Energy since 2000. In 2001­06 the region attracted 13 percent of Telecommunications 25% the total investment in private infrastructure projects in 25% developing countries, more than twice its 5 percent share in 1990­2000. Much of the growth in investment has been driven by projects in India. In that country more than 117 PPP proj- ects achieved financial closure in the three years from Multisector 2004 to 2006, compared with 104 projects in the previ- 43% ous eight years. Many were in transport. India's growing PPP program for highways accounted for 80 percent of the investment in public-private partnerships in the coun- A clear trend in the region is the growing role of local try. Having successfully concessioned the Delhi and Mum- players: domestic infrastructure developers have won bai airports in 2006, the government is now developing most of the recent large PPP projects, including the ultra- an ambitious PPP program for airports, and another for mega power plants in India. This is a welcome trend, as it ports. And some large cities in India are planning PPP reflects the growing capacity and appetite of local players projects in urban transport (bus and rail). The power sec- and is well suited to the region's political environment. tor has also seen recent activity: in 2007 India successfully But much remains to be done to meet the large infra- awarded two "ultra mega" (8,000-megawatt) power structure needs in this region. Concerted action is needed projects through international competitive bidding. to improve policy and regulatory frameworks; develop Beyond India, most South Asian countries, including public sector capacities to identify, procure, and oversee postconflict Afghanistan, have successfully liberalized and public-private partnerships; and develop financial mar- introduced competition in telecommunications, attracting kets capable of providing long-term local currency re- significant investment. Yet despite stated policies aimed at sources for infrastructure projects. bringing in private investment, progress outside telecom- munications and power generation has been slow. To help Key areas of PPIAF funding promote investment, in 2006 Pakistan established a proj- PPIAF support to governments in South Asia has been ect development fund and a financing facility for develop- aimed largely at addressing upstream policy and regula- ing a pipeline of bankable public-private projects. tory issues. Another focus of support has been assessing, 21 in consultation with stakeholders, alternative models for · Supporting the Department of Economic Affairs in de- public-private partnership that might be feasible in the pre- veloping a panel of transaction advisors and guidelines vailing institutional and political environment (box 6). for consultants to ensure that government officials re- ceive good-quality advice on preparing and imple- SupportingimplementationofIndia'sPPPprogram menting PPP transactions. India continues to face tremendous investment needs in · Helping the Planning Commission incorporate inter- infrastructure: recent estimates suggest requirements of national best practices in designing guidelines for the $492 billion over the five-year period ending 2012. Hop- appraisal and evaluation of PPP projects; in develop- ing to mobilize about a third of this from the private sector, ing concession agreements for private participation in the government is intensifying efforts to facilitate public- roads, ports, and airports; and in addressing regula- private partnerships. PPIAF is supporting these efforts by: tory and institutional issues to support successful im- plementation of PPP projects. · Assisting initiatives to engage stakeholders in design- · Recommending policy, regulatory, and institutional ing sector reforms and sharing experience (box 7). reforms to the Ministry of Shipping, Road Transport, · Helping the government undertake a comprehensive and Highways with the aim of scaling up private par- review of financing mechanisms for existing PPP proj- ticipation in port development and supporting imple- ects, identify constraints to expanding the range of po- mentation of the National Maritime Development tential investors, and design policy interventions to Program launched by the Indian government. address financial constraints. Box 6 Engaging stakeholders in water and sanitation reform in Pakistan Improving water supply and sanitation services is a priority prove management information systems as it continues to for the provincial government of Punjab, in Pakistan. Rec- assess PPP options that will help enhance and expand ser- ognizing the need for policy, regulatory, and institutional vices. Using a competitive process, the government has ap- reforms in the sector, the government asked for PPIAF's pointed chief executive officers for four water and sanita- support to help craft key elements of the reform, to be tion authorities. targeted to eight cities. PPIAF funding also helped the government build an outreach program to engage stake- holders in extensive consultation on options for reform, including potentially a public-private partnership. Feedback from all stakeholders helped the government decide to increase efforts to corporatize water and sanita- tion authorities in large cities. The government's aim is to strengthen accountability and sector governance and im- 22 Box 7 Bringing stakeholders together in India PPIAF has supported several initiatives in India aimed at organized by the ministry together with the World bringing stakeholders together to explore opportunities Bank, the International Finance Corporation, and the for public-private partnerships, share international experi- Infrastructure Development Finance Corporation (an ence, and learn from one another: Indian financial institution supporting infrastructure development)--brought together more than 200 · A PPIAF grant is helping the Institute for Regulation and stakeholders, including financiers, private investors, Competition, set up by the grassroots consumer protec- senior government officials, and experts on public- tion organization Consumer Unity & Trust Society private partnerships. (CUTS), create a comprehensive capacity-building plan for engaging stakeholders in an infrastructure reform program. The institute will hold workshops to educate different groups of stakeholders about regulation and competition and to help incorporate their inputs and concerns into the reform process. · PPIAF support to the Ministry of Finance aided a high- level conference to share international experience with public-private partnerships and showcase PPP opportunities in India. The February 2007 conference-- Supportingstate-levelactivitiesinIndia municipality of Ahmedabad. Funding also supported Beyond these initiatives at the national level in India, PPIAF consumer surveys and stakeholder consultations. has also supported activities at the state level to facilitate public-private partnerships. This support includes: Helpingtomapaccesstoinfrastructure In the Indian state of West Bengal PPIAF funding for a · Awarding a grant to the government of Maharashtra pilot is helping to create a geographic information system to support efforts by the power transmission utility to (GIS) database with maps showing access to infrastruc- improve its capital investment program and evaluate ture by income level as well as agricultural and environ- PPP options. mental conditions. This tool will help the government · Assisting the governments of Himachal Pradesh and and other stakeholders develop evidence-based policy Uttarakhand in developing frameworks for integrat- and design development programs to address the needs ed, river-basin-wide planning of hydropower proj- of local areas and excluded groups. It will also aid in ects to ensure that risks and benefits are appropri- monitoring the local impact of policies and programs. ately allocated. · Supporting efforts by the government of Gujarat to ex- FacilitatingfinancinginPakistan plore ways to improve water supply and sanitation ser- In Pakistan PPIAF approved technical assistance for the vices in Gandhinagar and the urban agglomerations of Infrastructure Project Financing Facility (IPFF), a new Western AUDA that have since been merged with the 23 nonbank financial institution set up by the government to activity will also provide guidance to the municipality in help catalyze finance for PPP infrastructure projects. The structuring and implementing two pilot projects, one for activity supports IPFF in developing its strategy and busi- primary collection and the other for landfill development ness plan by assessing the main gaps in the financial mar- and management. ket, financial products that IPFF could offer to fill these gaps, and the demand for these products. Expandingruralaccesstotelecommunications In fiscal 2007 PPIAF approved funding for two activities AidingKabulinmanagingsolidwaste in the telecommunications sector in South Asia. In Paki- PPIAF is assisting the municipality of Kabul in develop- stan PPIAF is helping to design and implement a univer- ing a strategy for using public-private partnerships to sal service scheme. The first pilot is under way. And in Sri manage solid waste collection and disposal. The activity Lanka it is providing support to evaluate PPP options for involves reviewing the legal and regulatory framework developing a national backbone network. The aim is to for operations in urban sanitation and assessing the re- allow all operators efficient open access to the network, sponsiveness of national, regional, and international in- to help increase the affordability of telecommunications vestors to potential opportunities in PPP projects. The services. 24 Central Asia and Europe Table 5 PPIAF activities in Central Asia and Europe, fiscal 2000­07 In fiscal 2007 PPIAF funded 11 new activities in Central Fiscal year Number of activities Funding ($ millions) Asia and Europe (table 5). The funding amounted to 2000 7 1.21 $2.35 million, up from $1.86 million in fiscal 2006. The 2001 11 3.01 largest share, slightly more than half, went to the trans- 2002 6 2.21 port sector, to help governments develop highways and 2003 8 2.76 railways through public-private partnerships (figure 7). 2004 8 1.61 2005 14 3.10 The next largest shares went to multisector activities 2006 10 1.86 aimed at strengthening institutions and regulatory 2007 11 2.35 frameworks for public-private partnerships and to tele- Total 75 18.11 communications activities to improve rural access to services. Figure 7 PPIAF funding for Central Asia and Europe Regional overview by sector, fiscal 2007 In 2006, for the second year running, Central Asia and Energy Europe attracted more investment in infrastructure proj- 6% ects with private participation than any other developing region except Latin America. Investment commitments for the year, at $23 billion, were lower than in 2005 but Multisector Transport 25% still at a high level for the region. Most went to countries 54% that have joined or are seeking to join the European Union (EU), where regulatory and market structure re- forms undertaken as part of the accession process have Telecommunications helped paved the way for investment. Yet other low- and 15% middle-income countries in the region also are striving to improve infrastructure services through public-private partnerships. ing as the power sector moves toward greater market As in most of the developing world, the telecommuni- concentration and vertical reintegration. cations sector has accounted for much of the activity in Private activity in water and transport has been rela- recent years, attracting around 70 percent of regional in- tively limited. In the water sector private participation vestment in 1990­2006. Private participation was exten- increasingly occurs through management and lease con- sive in mobile telephony but limited in fixed line services, tracts that rely on public investment. In the transport especially in the low-income countries of Central Asia. A sector it is concentrated in seaports and airports. En- major emerging issue is the lack of competitive markets; couraged by growing private activity in roads in other many countries granted exclusivity periods to private op- regions, however, countries in Central Asia and Europe erators to increase the attractiveness of investments. are now seeking to develop highways and railways Private participation is seen throughout the energy through public-private partnerships. sector--in power generation and distribution and in gas The profile of private participants has changed over transmission and distribution. Among developing regions time. Western European companies have continued to Central Asia and Europe has been the most active in maintain a strong presence among new EU members. But privatizing electricity distribution. Encouragingly, private utilities from other transition economies, particularly the participation has improved performance, including re- Russian Federation, have started acquiring assets and ducing losses. But new regulatory challenges are emerg- winning concessions in the region. 25 Key areas of PPIAF funding CAREC Members Electricity Regulators Forum. In re- In fiscal 2007 PPIAF awarded funding to five countries in sponse to a request from a ministerial-level meeting of Central Asia and Europe--Armenia, Bosnia and Herze- CAREC, PPIAF supported the formulation of a compre- govina, the former Yugoslav Republic of Macedonia, the hensive strategic framework for regional cooperation in Republic of Serbia, and Turkey--as well as to regional the energy sector. The framework, which will guide key activities. investments as well as policy and regulatory initiatives, has since been endorsed by a ministerial-level working Improvingtransportservices group of CAREC. In the transport sector PPIAF directed much of its sup- PPIAF also provided support to a multicountry work- port in fiscal 2007 to activities relating to highways and ing group to aid in assessing the commercial viability of a railways, where private participation is particularly low. proposed electricity transmission project linking Central A regional study launched in 2007 aims to provide guid- and South Asia to facilitate cross-regional electricity trade ance to decision makers in preparing and implementing (box 9). PPP projects in transport, drawing on lessons from recent experiences both in the region and elsewhere. The em- ReformingmunicipalservicesinFYRMacedonia phasis is on Southeast Europe, where a surge of interest In FYR Macedonia most municipal services have suffered in transport projects has led to a rash of unsolicited pro- for the past decade and a half from neglected mainte- posals, and on Central and Eastern Europe. Before invit- nance, rigid price controls, and poor financial manage- ing in the private sector, countries in these regions need to ment. PPIAF is funding a study to help the Ministry of create appropriate regulatory regimes, develop capabili- Finance and municipal governments, in consultation with ties in assessing fiscal risks, and establish competitive ten- stakeholders, design a coherent program of reform to ad- dering processes. dress the problems. The aim is to develop reform options, PPIAF also provided support to country activities. In evaluate institutional options (including public-private Bosnia and Herzegovina PPIAF is funding a review aimed partnerships) for improving services, enhance the busi- at strengthening the institutional framework for PPP ness climate, and meet the standards for service provision projects in the highway sector and building public sector required for EU accession. The study complements ongo- capacity for designing and implementing such projects. ing work supported by other bilateral donors to establish PPIAF is also supporting preparation of an initial PPP baseline data on the provision of municipal services. pilot for Corridor Vc, part of the Trans-European Net- work in Southeast Europe (box 8). ScalingupthePPPprograminTurkey In Armenia PPIAF responded to the government's re- Turkey's PPP program dates back to 1984, when the leg- quest for help in preparing a concession for Armenian islature passed a PPP law for power generation projects. Railways, along with follow-up support to hire transac- Another law, on build-operate-transfer (BOT) projects, tion advisors to assist in managing the bid process. And was enacted in 1994. These laws led to the use of several in the Republic of Serbia technical assistance is helping to PPP models in power generation and airport develop- define a framework for access to rail infrastructure that is ment. Not all these projects have been trouble free. The consistent with EU directives and structured to encourage power generation projects were negotiated transactions, competition and private investment in international and tariffs were high. And some legal issues have compli- freight and passenger service. cated BOT projects. As Turkey prepares for its next phase of economic de- SupportingregionalcooperationinCentralAsia velopment and accession to the European Union, the PPIAF continues to support the strengthening of regional government is committed to developing a second genera- cooperation forums such as the Central Asia Regional tion of PPP projects--this time using a more efficient and Economic Cooperation (CAREC) Program and the fiscally sustainable model under a new PPP law that is 26 Box 8 Developing a highway network in Bosnia and Herzegovina Bosnia and Herzegovina considers the development of a help identify other potential sources of financing to com- highway network--specifically, the construction of 290 plement private investment (such as EU grants and bilat- kilometers of the highway known as Corridor Vc--to be eral and multilateral loans) and recommend model con- a priority for its economic development. Part of the cession documents and procurement procedures. Trans-European Network in Southeast Europe, Corridor Vc would link to Croatia's Port of Ploce, helping to boost trade. To ensure that the financial and technical planning re- flects global best practices in highway development, par- ticularly lessons from other countries of Central and East- ern Europe, the government requested assistance from PPIAF. The PPIAF support will help the government in drafting legislation to facilitate private participation, iden- tifying ways to strengthen institutions, and ensuring that the plans are economically and financially viable and suit- able for a concession. The PPIAF-funded activity will also being prepared. The government has requested PPIAF 70 applications. The selection and award process is un- support to consolidate, strengthen, and harmonize the der way. policy, legal, and regulatory framework and establish a central PPP unit to help implement projects with private Facilitatingprivateparticipationinaregional operators. gasmarket TheninecountriesofSoutheastEurope,alongwithGreece Supportingsmall-scalehydropower and Turkey, signed a memorandum of understanding in inFYRMacedonia Athens in 2003 setting out their intention to develop a Developing indigenous energy resources is a priority for regional gas market and gas competition. To support the the government of FYR Macedonia, and it sees small- effort, PPIAF and the Energy Sector Management Assis- scale hydropower development as playing a vital part in tance Program (ESMAP) are cofinancing a study to iden- this. The country has about 100 sites considered eco- tify regional, cross-border, and country-specific infrastruc- nomically feasible for hydropower generation of up to 5 ture projects--for gas transmission, distribution, and megawatts--sites that together could generate more storage--that are economically, financially, and techni- than 10 percent of the country's electricity requirement. cally sound. The work includes assessing the economics of PPIAF helped the government develop a legal, regula- greater gasification based on Russian gas, pipelines link- tory, and institutional framework for small hydropower ing Turkey with Western Europe, and increased imports projects as well as prepare a bid package for selecting of liquefied natural gas (LNG). The study also will recom- private developers through a competitive bidding pro- mend reforms that would support greater gasification in cess. The first package of 60 sites attracted more than countries of Southeast Europe. 27 Box 9 Facilitating electricity trade between Central and South Asia Afghanistan and Pakistan are struggling to meet growing demand for electricity. Meanwhile, the Kyrgyz Republic and Tajikistan have surplus electricity and are looking for export markets. The governments are meeting halfway: as the first phase of a project to develop electricity trade be- tween Central and South Asia, a high-voltage transmis- sion line is to be built through Afghanistan. The project will entail developing the transmission infrastructure to export at least 1,000 megawatts of electricity from Tajiki- stan to Pakistan through Afghanistan--as well as harness- ing surplus power for export from the Kyrgyz Republic. Getting the project structure right is critical: it will in- Participants in the 6th Ministerial Conference of the Central Asia volve four governments, potential private investors, and Regional Economic Cooperation (CAREC) Program, held in international financial institutions. To help, PPIAF is fund- Dushanbe, Tajikistan, November 2­3, 2007. ing a study to assess risk, review financial feasibility, evalu- ate alternative PPP options, identify private investors, and develop the institutional framework and legal structure for the project. South Asia and Central Asia and Europe team, New Delhi Bernadette Nogueiro, Program Assistant; Bhavna Bhatia, Regional Program Leader for South Asia and Central Asia and Europe; and Anupam Sharma, Infrastructure Specialist 28 East Asia and Pacific Table 6 PPIAF activities in East Asia and Pacific, fiscal 2000­07 PPIAF granted funding to 17 new activities, totaling $2.43 Fiscal year Number of activities Funding ($ millions) million, in East Asia and Pacific in fiscal 2007 (table 6). 2000 11 2.64 This support represents a substantial increase in the num- 2001 11 3.26 ber of projects and a slight increase in funding from fiscal 2002 17 3.58 2006. The energy sector and the water and sanitation sec- 2003 8 1.59 tor both accounted for around a third of the funding (fig- 2004 16 3.80 2005 15 3.09 ure 8). Most of the funding went to support infrastructure 2006 11 2.07 development strategies (54 percent) and policy, regulatory, 2007 17 2.43 and institutional reforms (38 percent). Total 106 22.46 Regional overview It is now 10 years since the Asian crisis rolled through the Figure 8 PPIAF funding for East Asia and Pacific by sector, fiscal 2007 region, and strong growth has returned. China has seen the fastest growth, but other low-income economies-- Water & sanitation Energy such as Cambodia, the Lao People's Democratic Repub- 31% 34% lic, Mongolia, and Vietnam--are now expanding by 8­10 percent a year. Indonesia and the Philippines are also showing good performance, with growth of around 5­6 percent a year. The substantial economic and sector reforms initiated Transport 6% Multisector by many East Asian governments have helped drive this 2% broad regional growth. Yet investment in infrastructure, Telecommunications 27% particularly private investment, has yet to regain its pre- crisis levels. Investment in infrastructure projects with private participation has leveled off in the past three Increasingly the focus is also falling on the need for years, and in 2006 it amounted to about $18 billion, only governments to put into place processes to deliver truly 37 percent of its 1997 peak. bankable projects for private investment. Governments Investment needs for expanding and improving ser- have often identified and promoted projects without be- vices remain huge: an estimated $200 billion annually ing able to provide the analysis, prioritization, and prepa- over the next five years. The public sector alone cannot ration needed to successfully take them forward. As a meet these requirements. result, PPIAF faces continuing demand for assistance in Many countries in the region have shown a commit- reducing the scope for uncertainty about laws and poli- ment to developing an enabling environment that would cies and improving other aspects of the environment for encourage private investment, and many have undertaken infrastructure investments. major macroeconomic reforms that have delivered a more stable and diversified economy. Yet private investors re- Key areas of PPIAF funding main focused on the need for fair and consistent legal PPIAF's East Asia portfolio has been selective, focusing frameworks--a cornerstone of public-private contractual on countries that have made more progress while also arrangements. Allied with this is the continuing need to reflecting its demand-responsive approach. PPIAF activi- develop and strengthen regulatory frameworks for effec- ties have been closely supporting the upstream policy tive infrastructure provision by both the public and the work by governments across the region as they address private sector. aspects of the environment for public-private partner- 29 ships. Even as the upstream work continues, however, ef- (box 10). The work will include identifying possible ways forts will also be needed to strengthen processes for de- to mobilize the private sector to help out in these efforts. veloping and assessing projects--enabling governments Away from large urban centers in Vietnam, only to deliver better, more bankable projects. around 200 district towns have piped water supply--and even these often have limited coverage. To expand ser- InvestinginpowerandwaterinVietnam vices in district towns, the government has launched an In Vietnam PPIAF has been supporting several activities ambitious program using innovative methods. A PPIAF- in the energy sector. The support is aimed at helping to funded activity is helping to pilot an approach in one attract new investment in power generation--critical to province that involves awarding contracts to design and meet the rapid growth in electricity demand, averaging build water systems, then contracting out the operations 15 percent or more a year. One activity is supporting the to domestic private operators for 5­10 years. development of a framework for tendering new thermal generation projects. Another is supporting the govern- SupportingpowerreforminTimor-Leste ment's electricity reform agenda, aimed at moving toward Timor-Leste has experienced much turbulence since its a market-oriented power sector. This activity is aiding the independence in 1999, and big shortfalls in infrastructure Electricity Regulatory Authority of Vietnam in develop- persist. An earlier PPIAF activity supported reforms in ing the transmission and bulk supply licenses needed to the power sector centered on structural and regulatory initiate a competitive generation market. arrangements for the state-owned utility, Electricidade de PPIAF is also supporting activities in the water sector. Timor-Leste. A second PPIAF activity is helping the gov- One activity is helping the Hanoi Water Business Com- ernment commercialize the utility and improve its gover- pany better understand the options for improving man- nance with the aim of strengthening its performance and agement of its network and reducing nonrevenue water paving the way for private involvement. These efforts are Box 10 Minimizing water losses in Hanoi Among the most critical infrastructure issues facing the city of Hanoi is the loss of water through its piped net- work. The substantial leakage undermines service quality and limits the ability to expand services to unserved com- munities, often the poorest groups. In the long term it will affect utilities' financial sustainability. The Hanoi Water Business Company, determined to improve network management and reduce nonrevenue water, asked for PPIAF support to help in better under- standing its options. The support will help the company assess the physical losses as well as estimate the savings that could be achieved in selected supply zones. Once work to detect leaks has been completed, the company will develop a program to fund repairs. 30 expected to lead to a long-term concession or perhaps OtherPPIAFoutcomes divestiture. PPIAF-supported activities in East Asia delivered a range of results in fiscal 2007: ImprovingwaterservicesinMongolia In the Mongolian capital, Ulaanbaatar, about half the · In Vietnam the municipal government of Ho Chi Minh population lives in informal settlements, or ger areas. City adopted an implementation strategy and regula- Three-quarters of those living in ger areas subsist on less tory framework developed for a bus rapid transit sys- than $1 a day--and all must contend with inadequate tem. Competitive bidding has been launched for two housing and poor-quality services. Many depend for wa- routes, and bidding for two more routes is planned. ter service on kiosks and tanker trucks, both of which are · In Mongolia an infrastructure study was completed, difficult to operate and maintain. The need to provide and initial dissemination undertaken (box 11). The re- water and sanitation services to ger areas--especially as port, Rethinking the Delivery of Infrastructure Ser- they continue to grow with ongoing migration--is put- vices in Mongolia, sets out infrastructure development ting enormous pressure on the municipal water utility. A strategies for key sectors, including approaches to us- PPIAF activity is helping the utility assess options for ex- ing the private sector. The report was printed in Eng- panding access to water and sanitation services in ger ar- lish and Mongolian and is already available on the eas and improving the operations of water kiosks, tank- Web (http://www.worldbank.org.mn). ers, and bathhouses. · In Indonesia support to the Ministry of Finance's new Risk Management Unit helped assess public support Supportingreformandpovertyreduction for potential PPP projects. Key staff received training In the Philippines PPIAF is beginning to support activities on managing contingent liabilities in such projects, in- across the energy and water and sanitation sectors. One cluding aspects of a proposed guarantee fund. activity involved working with the Electricity Regulatory · Also in Indonesia a study identified key constraints to Commission on pricing issues associated with the emerg- private participation in the geothermal sector, which ing wholesale electricity supply market. has a small but important part to play in the develop- Another supported the development of a subsidy ment of the country's generation capacity. A presiden- framework for solid waste management services, which tial and ministerial working group has since been es- is expected to provide opportunities for private participa- tablished to move the geothermal agenda forward and tion. A third is aimed at supporting policy reforms in the help implement the study's recommendations. water sector by reviewing experience and lessons learned · In Cambodia a seven-day training program on regula- in private participation in water services outside Metro tory fundamentals and global trends in electricity sec- Manila. These small but strategic activities are in response tor reform was delivered in Phnom Penh in March to the government's developing agenda of economic re- 2007. The training was aimed at strengthening the form and its growing recognition of the part private in- technical capacity of the country's independent regula- vestment can play in infrastructure provision. tor, the Electricity Authority of Cambodia. In China and Thailand PPIAF is funding a few well- · An interactive electronic toolkit on cross-border infra- targeted activities with a strong focus on rural poverty. structure was launched at the 14th Greater Mekong These are aimed at supporting the provision of much- Subregion ministerial meeting, held at the Manila head- needed infrastructure, such as rural roads, rural piped quarters of the Asian Development Bank in June 2007. water supply, and telecommunications for remote rural Developed from a cross-border training program deliv- areas. In northern Thailand, for example, PPIAF is sup- ered in Cambodia in 2006, the toolkit provides regional porting an NGO that was selected to implement pilot infrastructure planners with a range of up-to-date mate- piped water supply projects in rural villages. rials. It is also available on the PPIAF Web site. 31 Box 11 Building for Mongolia's future Over the past 10 years Mongolia has shifted from a plan- driven by trade, mining, and continued urbanization. But based state economy to one in which private sector compe- these growth prospects will depend on developing critical tition drives significant growth. Further growth is expected, infrastructure. To support efforts toward that outcome, PPIAF funded a study aimed at devising a comprehensive infrastructure development strategy. Completed in 2006, the study as- sisted the government in designing reforms to deliver fur- ther improvements in the planning, quality, and coverage of infrastructure services vital to growth. In the short term private provision of infrastructure is being considered to meet the needs arising from mining development in the country's South Gobi region. PPIAF also provided funding for broad dissemination of the study, Rethinking the Delivery of Infrastructure Ser- vices in Mongolia, including its publication in Mongolian. · A study and training module was developed on inter- East Asia team, Manila national experience in designing performance-based Hope Gerochi, Program Analyst; contracts to reduce nonrevenue water. Key lessons and and Paul Reddel, Regional findings informed the preparation of bid documents Program Leader for East Asia for a contract to help address the nonrevenue water and Pacific problem in Ho Chi Minh City. 32 Latin America and the Caribbean Table 7 PPIAF activities in Latin America and the Caribbean, fiscal 2000­07 PPIAF funding for Latin America and the Caribbean Fiscal year Number of activities Funding ($ millions) again fell in fiscal 2007, with $1.06 million approved for 2000 14 3.20 4 activities (table 7). The decrease in the number of ac- 2001 12 1.67 tivities from the 13 in fiscal 2006 reflects guidance by the 2002 3 0.86 PPIAF Program Council to direct more of PPIAF's fund- 2003 7 1.60 ing to Africa and to low-income countries in general. 2004 9 2.14 2005 10 2.58 The new funding commitments in Latin America were 2006 13 1.65 spread fairly evenly across three sectors, with multisector 2007 4 1.06 projects receiving the largest share (figure 9). Total 72 14.76 Regional overview Despite a prevalence of middle-income countries, Latin Figure 9 PPIAF funding for Latin America America and the Caribbean continues to face widespread and the Caribbean by sector, fiscal 2007 gaps in infrastructure. A recent report supported in part by PPIAF found that while infrastructure services have Water & sanitation 34% improved in much of the region over the past decade, the Multisector region is presently spending less than 2 percent of GDP 36% on infrastructure, down from 3.7 percent in 1980­85.5 The report notes that yearly investment of about 3­6 per- cent of GDP is needed to achieve or maintain competi- tiveness with such countries as China and the Republic of Korea. Telecommunications In recent years there has been some resurgence in pri- 30% vate participation in infrastructure in the region. Invest- ment commitments amounted to $28 billion in 2006, marking the third consecutive year of growth. Telecom- private participation will require stronger legal, regulatory, munications projects received the largest share, just over and institutional frameworks; more transparent contract- $10 billion. But this level represented a 20 percent decline ing; and innovative financing structures that make projects from 2005, and the number of projects remained small. less risky and improve returns for investors. The transport and energy sectors had a far larger share of the projects (85 percent), mostly in countries with a well- Key areas of PPIAF funding established tradition of private participation in infra- PPIAF's portfolio for the region continues to yield pro- structure--including Brazil, Colombia, Ecuador, Mexico, ductive work on second-generation issues with wide ap- and Peru. plicability for its global portfolio. The resurgence in private investment in transport was driven by large highway transactions in Argentina, Mex- Expandingtelecomservicestothepoor ico, and Peru along with significant airport investments In Haiti, the poorest country in the region, PPIAF is assist- in Colombia and Mexico. The growth in energy invest- ing the government in its aim to promote a fair competi- ments came from a large number of transmission deals in tive environment for the telecommunications sector and Argentina and Brazil. to provide a universal access mechanism for expanding Private investment in Latin American infrastructure in services to the poorest. The country has just 150,000 fixed 2000­2006 was concentrated in six countries: Argentina, telephone lines for more than 8 million people, represent- Brazil, Chile, Colombia, Mexico, and Peru. Broadening ing teledensity of 1.8 percent. Recent dramatic growth in 33 Box 12 Targeting universal access across Latin America Established in 1988, Regulatel serves as a clearinghouse achieving universal access to information and communi- for telecommunications regulators in Latin America, help- cation technology services. The members of Regulatel ing to exchange information and experiences and coordi- asked PPIAF to fund an evaluation of universal access pro- nate regional integration. A recent emphasis has been on grams in 19 countries of Latin America. The aim was to assess the impact of these programs on communities and to develop recommendations for new models. The final report outlines the challenges in achieving universal access. It also makes recommendations on what national regulators need to do in their own countries, and many are already looking at revisions to their universal ac- cess programs. The report's cutting-edge research and recommendations have also generated much interest out- side the region. The report, New Models for Universal Access to Tele- communications Services in Latin America, is available on the PPIAF Web site (http://www.ppiaf.org). mobile subscribers has brought total teledensity closer to Strengtheningpoliciesandregulations 10 percent. But most mobile subscribers are in Port-au- PPIAF provides support to two regional associations of Prince and a couple of other urban areas, and private op- regulators in Latin America. Assistance to Regulatel, the erators show little interest in serving rural areas. association of telecommunications regulators, is support- Private investment has also been deterred by the out- ing programs for achieving universal access to informa- dated legal and regulatory framework, which lacks ele- tion and communication technology services (box 12). ments needed to develop a free and transparent competi- PPIAF support to ADERASA, the regional associa- tive environment--such as rules for interconnection, tion of water regulators that PPIAF helped launch in licensing, spectrum management, and competitive safe- 2003, went to three initiatives. These are designed to guards. To help address these issues, PPIAF is supporting help regulators track tariffs, increase transparency the drafting and adoption of a modern telecommunica- around regulation, and build capacity. ADERASA has tions law and defining the structures and procedures re- now developed four e-learning courses, each with 90 quired for a stronger regulatory authority. The PPIAF hours of instruction. More than 122 people from 14 support is also funding workshops and seminars aimed at countries in Latin America have completed one of the improving outreach to all major stakeholders. courses. 34 A new grant from PPIAF in fiscal 2007 will help ucts to "crowd in" private providers of finance. By lever- ADERASA professionalize its organization by estab- aging its capital base and AAA local credit rating, Bano- lishing a small secretariat, part of its effort to work bras would develop guarantee products to raise toward a goal of becoming largely self-financed in the infrastructure projects to investment grade, making them next four years. eligible for financing by Mexican institutional investors. Improvingfinancingforinfrastructure In Guatemala PPIAF is helping to establish a credit facility designed to counter key financing constraints to private investment in basic community infrastructure projects in marginal areas and neighborhoods. The support includes pilot design of a credit enhancement mechanism to help mobilize private financing from commercial banks. The aim is to develop an approach that could be replicated in other countries facing similar financing constraints. In Mexico PPIAF support is helping Banobras, the state-owned development bank, review its organizational structure and operational capabilities with a view to en- hancing its role as a facilitator for private participation in Latin America and the Caribbean, Global Knowledge infrastructure projects. The activity is aimed particularly Management team, Washington, D.C. at allowing Banobras to promote the development of Amit Burman, Portfolio Analyst; and Clemencia Torres de Mästle, more sophisticated loan and credit enhancement prod- Deputy Manager and Regional Program Leader 35 Global knowledge management Table 8 PPIAF global activities, fiscal 2000­07 Fiscal year Number of activities Funding ($ millions) As governments explore options for PPPs, they rely on global knowledge and proven practices to make sound 2000 11 2.16 2001 9 1.89 choices. PPIAF funding for global knowledge manage- 2002 3 0.14 ment activities helps identify, develop, and disseminate 2003 7 1.37 global best practices and supports research relating to 2004 6 1.57 emerging themes in today's environment for PPPs. 2005 12 2.69 2006 12 1.97 In fiscal 2007 PPIAF allocated $1.15 million (7 percent 2007 5 1.15 of its total funding) to five new activities in the global Total 65 12.94 knowledge management portfolio (table 8). The funding was divided fairly evenly among transport, energy, and multisector activities (figure 10). The level of funding was Figure 10 PPIAF funding for global activities down from fiscal 2006 as the Program Management Unit by sector, fiscal 2007 focused its efforts on completing several major global Energy knowledge pieces already under way. 33% Knowledge management products Transport 38% PPIAF-funded activities in fiscal 2007 included work on a range of knowledge management products. Providinglessonsandguidancethrough globaltoolkits Multisector PPIAF has produced several toolkits providing lessons 29% and guidance for governments. In fiscal 2007 it published the Toolkit on Market-Based Approaches in Private Sec- tor Provision of Bus Services. This resource looks at ways Web site, Body of Knowledge on Utility Regulation. The to improve urban bus transport, often the main mode of site brings together in one portal some of the most impor- transport for the urban poor in developing countries. tant work in this area, providing links to more than 300 Dissemination activities are planned for later in 2007 and references and case studies. PPIAF is forming a longer- 2008 in Africa, Latin America, and East and South Asia. term partnership with PURC to continue updating the PPIAF also approved a new activity to update a sec- site and to promote its use through the regulators' train- ond toolkit, Public-Private Options for Developing, Op- ing programs run through PURC and other institutes. erating, and Maintaining Highways: A Toolkit for Poli- PPIAF also published several reports responding to the cymakers. The new edition will incorporate lessons from limited regulatory capacity in many developing countries. public-private projects in the highway sector over the These reports explore the use of low-discretion rules, hy- past decade and a more detailed module on private par- brid models, and expert panels in regulatory systems. ticipation in operations and maintenance. Another, the Port Reform Toolkit, previously financed by PPIAF, was Providingdemand-responsiveuser'sguides updated by the World Bank. Another set of demand-responsive products consists of three simple user's guides. The first, Infrastructure Proj- Trackingtrendsandbestpracticesinregulation ect Preparation Facilities: Africa User's Guide, was pre- PPIAF continued its leadership role in developing knowl- pared in collaboration with the Secretariat of the Infra- edge on infrastructure regulation. Work in partnership structure Consortium for Africa (ICA). The guide is with the Public Utility Research Center (PURC), at the available in hard copy and on both the PPIAF and ICA University of Florida, culminated in the launch of a new Web sites. The second, Review of Risk Mitigation Instru- 36 ments for Infrastructure Financing and Recent Trends Outreach and dissemination and Developments, has also been published, along with a summary as a Gridline. Much progress was made in improving outreach and dis- The third user's guide, on donor financing instruments semination, which remained a priority for PPIAF in fiscal for infrastructure projects, is under preparation, again in 2007. The budget was doubled, and efforts to build part- collaboration with the ICA Secretariat. This guide is due nerships and improve dissemination were strengthened. to come out in 2008. Stronger outreach Exploringemerginglessonsonpublic-private PPIAF continues to work with partners to extend and en- partnerships hance its outreach. Following a successful road show in Several PPIAF-funded knowledge products explore East Africa in the spring of 2007, PPIAF participated in a emerging lessons on public-private partnerships in infra- West African one with the Water and Sanitation Program structure. One publication, Public-Private Partnership and Global Partnership on Output-Based Aid. The goal Units: Lessons for Their Design and Use, was launched was to promote opportunities for PPIAF grants and techni- in the fall of 2007. Also published was a study that looks cal assistance as well as areas for collaboration among the at frameworks and approaches for managing unsolicited three programs. PPIAF continues to work with the ICA proposals. And work on small-scale service providers is Secretariat in conceptualizing and delivering knowledge reaching conclusion. management products for an African audience. Also reaching completion is an empirical analysis PPIAF also continues its dialogue with civil society and that looks at the impacts and lessons of private partici- the private sector as stakeholders in the public-private ar- pation in electricity distribution and in the water and rangements it supports. PPIAF's field offices play a key sanitation sector. The data cover 297 utilities and 928 part in this by reaching out to stakeholders in developing state-owned enterprises. A parallel study of the impact countries to consult on ongoing PPIAF activities. of private participation in the water sector is document- ing seven case studies. Broader dissemination Efforts to broaden dissemination harness both electronic PPI Project Database and print formats. In fiscal 2007 PPIAF launched a Web- Another PPIAF initiative has focused on improving the based quarterly newsletter to disseminate information to quality of data in the World Bank­PPIAF Private Partici- donors, government officials, NGOs, and private sector pation in Infrastructure (PPI) Project Database and ad- organizations on its activities, products, and upcoming justing its methodology to better reflect the changing events. The newsletter is part of PPIAF's continuing ef- landscape of private participation. Quality control sys- forts to expand its outreach and include a broad range of tems are being improved to ensure the most complete participants in all its events. coverage possible given the existing method of data col- Thanks to the newsletter and a Google advertising lection. campaign, PPIAF has maintained a strong presence on In addition, coverage is being broadened to better cap- the Internet. Visitors to its Web site averaged about ture projects that involve private participation in their 13,400 a month in fiscal 2007, up by about 30 percent management but not their financing--as well as small from fiscal 2006. To maximize outreach, PPIAF also projects, particularly those involving small local private funded Google advertising campaigns for the launch of operators. The initiative is also exploring ways to include the PPIAF-supported Body of Knowledge on Utility Reg- private activity in solid waste management, a sector that ulation site and the PPI Project Database site. is attracting growing private participation in developing A key tool in further expanding Internet-based out- countries and is also part of PPIAF's mandate. PPIAF's reach will be a new PPIAF Web site, to be launched in work to improve and adjust the database will continue 2008. The site has been designed to greatly improve acces- into fiscal 2008. sibility and searchability, with more knowledge resources 37 Box 13 PPIAF publications launched in fiscal 2007 PPIAF features three publications series that draw on local, · Recent Trends in Risk Mitigation Instruments for regional, and global partners. Gridlines are four-page Infrastructure Finance: Innovations by Providers notes that focus on emerging trends in PPPs to give an Opening New Possibilities overview of projects all over the world. Trends and Policy · Relying on Expert Panels to Help Settle Regulatory Options publications are derived from broad research un- Disputes: Lessons from Chilean Experience derlying both PPIAF and non-PPIAF activities. Working Pa- pers include case studies, conference papers, and other · Revival of Private Participation in Developing Country products of informal research. Infrastructure: A Look at Recent Trends and Their Policy Implications Gridlines · Unsolicited Infrastructure Proposals: How Some · The African Project Preparation Gap: Africans Address Countries Introduce Competition and Transparency a Critical Limiting Factor in Infrastructure Investment · Using Management and Lease Affermage Contracts · Big Challenges, Small States: Regulatory Options for Water Supply: How Effective Are They in to Overcome Infrastructure Constraints Improving Service Delivery? · Financing Infrastructure in Africa: How the Region Can Attract More Project Finance Trends and Policy Options series · Regulatory Governance in Infrastructure Industries: · The Growing and Evolving Business of Private Assessment and Measurement of Brazilian Regulators Participation in Airports: New Trends, New Actors Emerging · Review of Risk Mitigation Instruments for Infrastruc- ture Financing and Recent Trends and Developments · Helping a New Breed of Private Water Operators Access Infrastructure Finance: Microfinance for Working Papers Community Water Schemes in Kenya · Evaluating Regulatory Decisions and Sector Outcomes · Matching Regulatory Design to Country in Infrastructure Industries: Results from Africa Circumstances: The Potential of Hybrid and Other Developing Countries and Transitional Models · Expert Panels in Regulation of Infrastructure in Chile · Port Reform in Nigeria: Upstream Policy Reforms · Infrastructure Regulation in Developing Countries: Kick-Start One of the World's Largest Concession An Exploration of Hybrid and Transitional Models Programs · Outsourcing Regulation: When Does It Make Sense · Private Participation in Electricity: The Challenge and How Do We Best Manage It? of Achieving Commercial Viability and Improving Services · Unsolicited Infrastructure Proposals: How Some Countries Introduce Competition and Transparency · Private Participation in Water: Toward a New Generation of Projects? 38 organized by theme and more stories on PPIAF activities. With the new site, PPIAF will reinvigorate the Google ad- vertising campaign and further expand distribution lists. Beyond these efforts, PPIAF has continued to add to its series of accessible, four-page briefs summarizing key Cosponsored publications messages from innovative projects and knowledge man- · The Challenge of Reducing Non-Revenue Water agement work. In fiscal 2007 it produced 14 new Grid- (NRW) in Developing Countries: How the Private lines (box 13). PPIAF also launched its new Working Sector Can Help--A Look at Performance-Based Papers series, aimed at publishing quickly and inexpen- Service Contracting sively--and in some cases only on the Web--a large num- ber of products, such as reports, case studies, and back- · Explanatory Notes on Key Topics in the Regulation ground papers. of Water and Sanitation Services · Infrastructure in Latin America and the Caribbean: Recent Developments and Key Challenges · Infrastructure Project Preparation Facilities: Africa User's Guide · Infrastructure Service Provision in El Salvador: Fighting Poverty, Resuming Growth--Strategy Report (English and Spanish) Toolkits · Port Reform Toolkit: Effective Support for Policymakers and Practitioners (2nd ed.) · Toolkit on Market-Based Approaches in Private Sector Global Communication team Provision of Bus Services Amsale Bumbaugh, Information Specialist; and Tracey Miller, Communication Specialist For a list of all PPIAF publications, see annex 3. 39 Finances and resource mobilization A focused governance structure helps PPIAF ing the minimum Core Fund contribution and channel resources to beneficiary governments with the consent of the Program Management in response to demand. These resources are Unit and the Program Council. used to help the beneficiaries design programs Each donor enters into a trust fund agree- for involving the private sector in infrastruc- ment with the World Bank Group for its con- ture. PPIAF's innovative financing structure tributions to PPIAF. The World Bank Group supports this demand-responsive approach. recovers a small charge for costs associated with administering the trust funds. Funding and expenditure structure Contributions received PPIAF received a total of $25.8 million in cash PPIAF has a two-tier financial structure: a Core from its donors in fiscal 2007, including $1.5 Fund and Non-Core Funds. The Core Fund million in net investment income (table 9). consists of funds that are not subject to prior That marks a 100 percent increase over the restrictions on the choice of country or sector. total contributions of $12.8 million received Core funds contributed by regional develop- in fiscal 2006. The increase is due largely to the ment banks, however, are limited to eligible bunching of cash contributions from some ma- countries and consultants as defined by the jor donors during PPIAF's fiscal year, which dif- charter of the contributing regional develop- fers from the fiscal years of many of its donors. ment bank. Two additional donors, the Australian Agency The Core Fund is used for activities falling for International Development (AusAID) and within PPIAF's approved work program and the International Finance Corporation, joined may be applied to governance costs as well as PPIAF. program activities. All donor contributions are Contributions in fiscal 2007 brought the to- designated for the Core Fund unless otherwise tal since PPIAF's inception to $148 million indicated. (table 10). Core Fund contributions by eligible organi- zations start at $250,000 a year. All contribu- Expenditures tions are in cash, though PPIAF may consider PPIAF's expenditures fall into two main cate- accepting contributions in kind in limited cases. gories: program activities and program admin- Non-Core Funds are subject to donor restric- istration. In fiscal 2007 (July 1, 2006­June 30, tions relating to themes, regions, or activities. A 2007) total expenditures amounted to $19.5 donor may set up a Non-Core Fund after mak- million (table 11). 40 Table 9 Member contributions to PPIAF, fiscal 2006 and 2007 ($ thousands) Type of funding Receipts in fiscal 2006 Receipts in fiscal 2007 Core 10,054 21,512 Non-Core 2,000 2,789 Net investment income 714 1,533 Total funding 12,768 25,834 Table 10 Member contributions to PPIAF: confirmed receipts as of July 1, 2007 ($ thousands) Summary Type of funding Receipts Core 108,425 Non-Core 35,905 Net investment incomea 3,676 Total funding 148,006 Core funding Member Durationb Receipts Asian Development Bank January 2001­December 2006 1,250 Canada July 1999­June 2007 1,568 European Commission July 2005­June 2007 1,118 France July 2000­June 2006 1,310 Germany January 2001­June 2007 1,699 International Finance Corporation July 2006­June 2007 250 Italy July 2003­June 2004 250 Japan July 1999­June 2006 10,435c Netherlands July 2001­June 2007 3,000 Norway July 1999­June 2007 2,850 Sweden July 2000­June 2007 2,220 Switzerland July 1999­June 2007 6,435 United Kingdom July 1999­June 2007 57,755 United States July 2003­June 2005 750 World Bank July 1999­June 2007 17,535 Total Core funding 108,425 Non-Core funding Member Durationb Receipts Japan March 2001­June 2006 5,608d Sweden July 2002­June 2007 7,539e Switzerland July 1999­June 2005 3,082f United Kingdom July 1999­June 2005 19,676g Total Non-Core funding 35,905 Note: The figures in the table may vary slightly from those reported in previous annual reports because amounts are pledged in own currency and then converted to U.S. dollars at the time of transfer. a. Pursuant to annex 1, paragraph 4, of the trust fund agreements. This amount supersedes earlier references to net investment income in other reports. b. Refers to the period for which the received amount is allocated. c. Includes $1.4 million in unallocated cash from the Infrastructure Action Program. d. Targeted to countries in East Asia. e. Targeted to countries in Sub-Saharan Africa. The Swedish Non-Core Trust Fund under Multi-Donor Trust Fund I was fully disbursed on June 30, 2007. A new Swedish Non-Core Trust Fund exists under Multi-Donor Trust Fund II. f. Targeted to countries in Eastern Europe and Central Asia. The Swiss Non-Core Trust Fund was fully disbursed on June 30, 2007. g. Targeted to selected low-income countries in Asia and Sub-Saharan Africa. The U.K. Non-Core Trust Fund was fully disbursed on June 30, 2005. 41 Of this amount, $16.7 million went to program activi- Table 11 PPIAF expenditures for program activities ties, up from the $15.6 million in fiscal 2006 (table 12). and administration, fiscal 2006 and 2007 Meanwhile, Program Management Unit staff costs de- ($ thousands) clined by 15 percent as a result of the departure of two Expense category 2006 2007 regional program leaders, whose portfolios (Central Asia Program activities 15,594 16,748 and Europe, Middle East and North Africa, and Latin Program administration America and the Caribbean) were absorbed by the re- Program Management Unita 2,780 2,429 maining regional program leaders (see table 11). Regional Regional coordination offices 1,425 1,450 Technical assessments of activitiesb 0 15 coordination office expenditures remained the same. Dissemination and outreachc 94 194 Other program administration expenditures 111 175 Sources and uses of funds Technical Advisory Paneld 77 149 Of the $148 million PPIAF has received since inception, Annual meeting costse 34 26 $128 million has been allocated to activities and slightly Total 18,579 19,546 more than $19 million to Program Management Unit a. Includes staff salaries (headquarters and regional coordination offices), and regional coordination office funds (table 13). benefits, overhead, travel, office space, administration, evaluation of proposals, In fiscal 2007 PPIAF's Multi-Donor Trust Fund I was and governance and coordination of donor relations. b. Includes fees paid to professionals to assess the technical feasibility closed, with $49 million in disbursements. As a result of of proposals. travel rebates and investment income earned by the end c. Includes activities related to the marketing and branding of PPIAF and of the fiscal year, the trust fund had approximately its products (such as annual reports, brochures, Gridlines, the newsletter, and the Web site). $25,000 in undisbursed funds. These remaining funds d. Includes fees paid to Technical Advisory Panel members for their time were either returned to the donor's balance account in reviewing PPIAF activities, their travel to Washington, and their participation in the annual meeting of donors. maintained with the World Bank or rolled over to Multi- e. Includes travel and per diem expenses of speakers and invited participants Donor Trust Fund II on a pro rata basis. Multi-Donor and beneficiaries and other costs related to the annual meeting (food and Trust Fund II remains the main trust fund in which donor conference services). contributions are received.6 Residuals from closed and canceled activities during the fiscal year were rechanneled Table 12 PPIAF program activity expenditures, to finance additional requests for technical assistance. fiscal 2006 and 2007 ($ thousands) With the launch of the Sub-National Technical As- Expense category 2006 2007 sistance Program, PPIAF received $2 million for fiscal Consultant fees and contractual services 13,562 14,808 2008 from the World Bank's Development Grant Facility Travel 1,115 1,190 and $3 million from the International Finance Corpora- Staff costs 916 750 tion. These funds will be used beginning in fiscal 2008. Total program activity expenditures 15,594 16,748 The U.K. Department for International Development has confirmed that it will contribute £5 million to the Sub-National Technical Assistance Program for fiscal Table 13 PPIAF sources and uses of funds as of June 30, 2007 ($ thousands) 2008­10. Receipts 148,006 Less approved activities 128,287 Less Program Management Unit and regional coordination office funds 19,014 Plus confirmed fiscal 2008 pledges 17,640 PPIAF 9,340 Sub-National Technical Assistance Program 8,300 Plus residuals from closed and canceled activities 8,264 Total expected funds 26,609 42 Single audit process The World Bank Group has instituted an annual "single audit" exercise for all trust funds. As part of this exercise the PPIAF program manager signs a trust fund represen- tation letter attesting to the correctness and completeness of the financial process for all PPIAF trust funds. The task manager for each approved activity is re- quired to confirm to the program manager that he or she has complied with all the terms set forth in the PPIAF award letter; has exercised due diligence with respect to the administration, management, and monitoring of the funds awarded for the activity; and has ensured that all expenses and disbursements accord with World Bank Katia Nemes, Senior Program Assistant; and Maria Anton Butler, procurement and administrative guidelines. Program Assistant 43 Annex 1 Governance structure PPIAF has a governance structure designed to · Approving the annual work program and ensure the quality of its activities and its account- financial plan ability to participating donors. At the top of this · Reviewing PPIAF's performance, including structure is the Program Council, made up of selecting activities for ex post evaluation by representatives of contributing donors (figure the Technical Advisory Panel A1.1). The Program Council is supported by the · Overseeing the Technical Advisory Panel independent Technical Advisory Panel, whose and the Program Management Unit. members are leading international experts in dif- In fiscal 2007 the Program Council con- ferent aspects of public-private partnerships in ducted its eighth annual meeting since PPIAF's infrastructure. PPIAF is managed by the Pro- launch in July 1999. Held on May 23­24, gram Management Unit in accordance with a 2007, the meeting was hosted by the govern- general strategy laid out in PPIAF's charter and ment of the Netherlands in The Hague. The in the annual work programs approved by the meeting featured presentations by the Pro- Program Council. gram Management Unit, along with other specialists, on emerging themes related to The Program Council public-private partnerships in infrastructure. Topics included trends in investment and As provided in PPIAF's charter of July 1999, types of players and new and emerging forms amended in July 2000 and May 2001, mem- of public-private partnerships, with a focus bership in the Program Council remains open on Africa. to eligible organizations contributing a mini- Donors endorsed the Program Manage- mum of $250,000 a year to PPIAF's Core Fund ment Unit's proposal for the Sub-National (table A1.1). Members may also contribute to Technical Assistance Program and agreed to a Non-Core Funds, whose use is restricted to launch date of July 1, 2007. Donors also particular themes, regions, or activities. agreed to move forward with the planning for The Program Council meets once a year to the next evaluation of PPIAF, which will be review the strategic direction of the PPIAF pro- completed in time for the 10th annual meet- gram, its achievements, and its financing re- ing, in 2009. quirements. Chaired by a designated represen- tative of the World Bank, the Program Council is responsible for: The Technical Advisory Panel · Considering and defining PPIAF policies Members of the Technical Advisory Panel are and strategies selected on the basis of their expertise in matters 45 Figure A1.1 Organizational structure of PPIAF Technical Advisory Panel Program Council PPIAF HQ (Washington, D.C.) Program management Global knowledge management Latin America and the Caribbean Outreach and dissemination Administration Dakar office Nairobi office New Delhi office Manila office West and Central Africa East and South Asia East Asia Middle East and southern Central Asia and North Africa Africa and Europe Pacific relating to public-private partnerships in infrastructure in regulatory agencies, activities supporting services for the developing countries. They are appointed by the chair of poor (including universal service funds and services by the Program Council after consultation with its members. small-scale providers), and pioneering transactions whose The Technical Advisory Panel is responsible for: financial closure PPIAF facilitated. The panel concluded that PPIAF's activities to explore · Providing advice, at the request of the Program Coun- emerging issues relating to public-private partnerships are cil, on issues relating to private involvement in infra- worthy of continued support. It commended PPIAF-funded structure in developing countries knowledge products as providing critical support for creat- · Reviewing and commenting on the PPIAF strategy as ing an enabling environment for accelerated investments. reflected in draft annual work programs prepared by The panel noted that the Program Management Unit has the Program Management Unit visibly strengthened its internal systems for measuring and · Evaluating the impact of the PPIAF annual work pro- monitoring the impact of activities at all stages--and has gram through ex post evaluation of selected activities. also improved reporting of events and follow-up with ben- The panel met twice in fiscal 2007. It held its 12th eficiaries. The panel also found much evidence of a broad- meeting in Washington, D.C., in January 2007. Panel ening consultative approach. Finally, it concluded that members also participated in the Program Council's an- PPIAF has been effective in producing and disseminating nual meeting in The Hague on May 23­24, 2007. knowledge products such as toolkits and publications. In fiscal 2007 the panel conducted an ex post review The membership of the Technical Advisory Panel un- of selected activities as part of its regular responsibility derwent several changes in fiscal 2007. Meg Osius, who for independent evaluation of the impact of PPIAF's had served as a member for seven years, retired from the program. It also reviewed the business plan for the Sub- panel. The Program Council voted in Eduardo Engel as National Technical Assistance Program. the new chair for the next year. And Rosalind Thomas The ex post review included feedback on assistance to had to leave the panel to attend to her new responsibili- project preparation units, toll road schemes for public- ties at the African Development Bank. The panel mem- private partnerships, support and capacity building for bers are as follows: 46 Table A1.1 Members of the PPIAF Program Council investment challenges, and links to sustainable develop- as of July 1, 2007 ment, including widened access to affordable services and Bilateral programs in renewable energy and energy efficiency. He Australia (Australian Agency for International Development, has worked in the energy sector for more than 25 years or AusAID) and was the founding director of the Energy and Develop- Canada (Canadian International Development Agency) ment Research Centre in South Africa. France (Ministry of Foreign Affairs) Germany (Federal Ministry for Economic Cooperation Eduardo M. Engel, Professor of Economics, and Development, or BMZ) Yale University Japan (Ministry of Finance) Eduardo Engel came to Yale in 2001 after a decade on Netherlands (Ministry of Foreign Affairs) the faculty at the University of Chile. He has published Norway (Norwegian Agency for Development Cooperation) (last contribution fiscal 2007) widely in the areas of macroeconomics, public finance, Sweden (Swedish International Development Cooperation and regulation. He was awarded the Econometric Soci- Agency) ety's 2002 Frisch Medal for the best applied article (em- Switzerland (State Secretariat for Economic Affairs) pirical or theoretical) published in Econometrica in the United Kingdom (Department for International Development) previous five years. His current research interests include United States (U.S. Agency for International Development) dynamic macroeconomic models and private participa- (last contribution fiscal 2005) tion in infrastructure. Multilateral Asian Development Bank Nasser Munjee, Chairman, European Commission Development Credit Bank, India International Finance Corporation of the World Bank Group Building on years of experience in infrastructure devel- United Nations Development Programme (observer status) opment and finance, Nasser Munjee serves as an advisor World Bank to governments in South Asia in the area of public- private partnerships. He was managing director of India's Infrastructure Development Finance Company and ex- ecutive director of the Housing Development Finance Meg Osius, President, MEO, Inc. Corporation. Meg Osius is an advisor to a variety of private investors, banks, public entities, and development banks on struc- Dianne Rudo, President, turing and accessing suitable funding for greenfield proj- Rudo International Advisors ects and facility upgrades in the oil and gas, power, trans- Dianne Rudo is a senior investment banker and financial port, and telecommunications sectors. She designs and consultant with more than 25 years of international and delivers executive-level training sessions worldwide. Meg domestic project and corporate finance transactional ex- retired from the Technical Advisory Panel at the end of perience with both the public and the private sector. She fiscal 2007. heads her own financial services company specializing in policy development and training on international project Anton Eberhard, Director, Management Program and corporate finance issues and transactions. Previously in Infrastructure Reform and Regulation, she was the vice president and head of the Project Finance University of Cape Town, South Africa Division at the Export-Import Bank of the United States. Anton Eberhard is a professor at the University of Cape Dianne takes up her membership starting fiscal 2008. Town, where he directs the Management Program in Infra- structure Reform and Regulation at the Graduate School Robin Simpson, Independent Consultant of Business. His research and teaching focus on the restruc- With global expertise in policy development for infra- turing and regulation of the electricity and water sectors, structure provision, Robin Simpson is a consultant and 47 senior policy advisor for Consumers International (based · Arranging for delivery of PPIAF programs and in the United Kingdom) as well as the European Commis- activities sion, World Bank, and Wateraid. He has written numerous · Providing secretariat services to the Program Council papers, participated in many international symposia relat- and Technical Advisory Panel ing to infrastructure, and worked on regional programs in · Maintaining effective relationships with contributors, Africa, Latin America, and Central and Eastern Europe. recipient governments, the private sector, and other Areas of particular interest include utility regulation and stakeholders pricing, private participation, and the development of con- · Proposing and administering the PPIAF work plan sumer rights institutions. Robin has been with the Techni- and budget and managing the disbursement of funds cal Advisory Panel since the beginning of 2007. · Overseeing the operations of the field-based regional coordination offices. Rosalind Thomas, Chief Executive Officer, SADC Development Finance Resource Centre Rosalind Thomas has years of demonstrated leadership in The Regional Coordination Offices African development finance. She is founding chief execu- PPIAF has four regional offices: tive officer of the Development Finance Resource Centre oftheSouthernAfricanDevelopmentCommunity(SADC), · East and Southern Africa, Nairobi established by the SADC ministers of finance to build the · West and Central Africa, and Middle East and North capacity of the regional Development Finance Institutions Africa, Dakar Network to engage in cross-border project lending, infra- · East Asia and Pacific, Manila structure development, public-private partnerships, and · South Asia, and Central Asia and Europe, New Delhi. support to small and medium-size enterprises. Rosalind Oversight of PPIAF activities in Latin America and the retired from the Technical Advisory Panel at the end of fis- Caribbean is managed out of PPIAF's headquarters in cal 2007. Washington, D.C. The regional coordination offices have the following The Program Management Unit key responsibilities: The Program Management Unit is responsible for the · Identifying opportunities for PPIAF assistance, sup- day-to-day management of PPIAF in accordance with the porting local requests for PPIAF interventions, and general strategy and the annual work program approved tailoring assistance strategies to local priorities and by the Program Council. conditions The unit remains small, focusing on administering the · Working with recipient governments and contribu- PPIAF program rather than delivering activities. PPIAF re- tors, international financial institutions, and other of- lies extensively on external consultants to deliver activities, ficial agencies to promote effective coordination of following World Bank guidelines on procurement. advisory activities The Program Management Unit's key responsibilities · Consulting private sector representatives to ensure include: that their perspectives are reflected in PPIAF advice and activities · Reviewing proposals for PPIAF assistance in accor- · Assisting in the supervision of PPIAF activities dance with the criteria and process approved by the · Fostering contacts and good working relationships Program Council (for activities funded from the Core with key government officials and representatives of Fund) or by relevant contributors (for activities funded the donor, multilateral, and investor communities. from Non-Core Funds) 48 Annex 2 Activities funded by PPIAF in fiscal 2007 Table A2.1 PPIAF activities and funding by region, sector, and type of activity, fiscal 2007 Number of Funding Share of Share of Region activities ($ thousands) activities (%) funding (%) Sub-Saharan Africa 32 7,620,266 36 44 East Asia and Pacific 17 2,426,172 20 14 Central Asia and Europe 11 2,354,402 12 13 South Asia 13 1,969,534 15 11 Global 5 1,147,160 6 7 Latin America and the Caribbean 4 1,057,000 5 6 Middle East and North Africa 5 822,528 6 5 Sector Multisector 31 5,837,641 36 34 Energy 18 4,244,900 21 23 Transport 13 2,929,850 15 17 Telecommunications 10 2,370,032 11 14 Water and sanitation 15 2,014,639 17 12 Type of activity Infrastructure development strategies 39 8,648,425 44 50 Policy, regulatory, and institutional reforms 19 3,356,468 22 19 Capacity building 13 2,272,900 15 13 Pioneering transactions 4 1,734,200 5 10 Emerging best practices 8 1,089,160 9 6 Consensus building 4 295,909 5 2 49 Table A2.2 PPIAF activities by region, fiscal 2007 Sub-Saharan Africa Country Activity Description Funding ($) Type of activity Cameroon Electricity Regulation Developing a dedicated financial economic 283,510 Capacity building Capacity Building and model to strengthen the capacity of the Financial Economic Model electricity sector regulatory agency (ARSEL). Guinea-Bissau Development of Legal and Supporting the creation of a regulatory, 75,000 Policy, regulatory, Institutional Framework for procedural, and institutional framework to and institutional Infrastructure PPPs improve governance around PPP transactions. reforms Kenya Public-Private Partnerships Supporting stakeholder workshops for the 11,067 Consensus building Forum Nairobi Central Business District Association to explore how PPPs could contribute to Kenya's economic growth and help reach the country's goals and vision for 2030. Liberia Telecom Sector Licensing Supporting implementation of a comprehensive 75,000 Policy, regulatory, Study and Industry fee and tax policy for the telecommunications and institutional Consultation sector to foster competition and improved reforms access to information technology. Madagascar Transport PPP Feasibility Conducting a feasibility study for a proposed 316,000 Infrastructure Study for Multimodal multimodal logistics platform at Antananarivo development Logistics Platform in to support the government's efforts to improve strategies Antananarivo the corridor's efficiency, develop exports, and generate employment while helping to lower prices for imported commodities. Malawi Mtwara Corridor PPP Projects Supporting preparation of the Mtwara Corridor 293,500 Infrastructure PPI projects in Malawi, including designing legal development and regulatory frameworks and building local strategies skills to develop and manage projects. Malawi Public Outreach and Planning opinion research and communication 149,500 Consensus building Communication Strategy for to help the government strengthen its outreach Urban Water Sector Reform and stakeholder consultations around reform in the urban water sector. Mozambique Case Study: Management Developing a case study of the Second National 75,000 Emerging best Model in Urban Water Water Development Project's successful practices Sector experience in implementing a delegated management model with private participation, including the role of the water regulatory agency. Mozambique Mtwara Corridor PPI Assessing potential PPPs in the Mtwara 310,000 Infrastructure Project Development Development Corridor Program, a regional development development initiative involving Malawi, strategies Mozambique, Tanzania, and Zambia, and building skills to develop and manage the projects. Mozambique Public-Private Partnership Building the capacity of the staff of Electricidade 69,050 Capacity building Capacity Building de Moçambique, the national power company, in carrying out negotiations and drafting legal documents, such as contracts, guarantees, shareholder agreements, operating agreements, and project finance loan agreements. 50 Table A2.2 PPIAF activities by region, fiscal 2007 (continued) Sub-Saharan Africa, continued Country Activity Description Funding ($) Type of activity Nigeria Assessment of Private Sector Creating strategies for introducing competition 245,800 Infrastructure Participation in Urban and and increasing efficiencies as part of the development Small Town Water Supply government's water sector reform program. strategies Nigeria Feasibility Study for Performing a feasibility study and developing an 390,000 Infrastructure Establishing a PPP action plan to help establish a PPP resource center, development Resource Center including recommendations for necessary policy strategies changes, laws, and regulations. Rwanda Legal and Financial Advice Providing legal and financial advice to help the 843,000 Pioneering for the Kivu Methane Project government finalize key project documentation transactions for the first stage of the Kibuye Power Gas Development and Power Generation Project, on Lake Kivu. Senegal Institutional and Regulatory Designing an institutional and regulatory 250,200 Policy, regulatory, Arrangements for the framework for oversight of the Dakar-Diamnadio and institutional Dakar-Diamnadio Toll Road toll road project, which will be implemented reforms as a public-private partnership. Senegal Pilot for Small-Scale Service Facilitating the involvement of small-scale 73,639 Infrastructure Providers in the Maintenance providers in the maintenance of rural water development of Rural Water Infrastructure infrastructure. strategies Sierra Leone Guidance for the Supporting implementation of the reform 75,000 Policy, regulatory, Telecommunications Sector program laid out in the newly adopted and institutional Policy and Regulatory Reform Telecommunications Act, including reforms stakeholder workshops. South Africa Assessment of Competition Examining the structure of supply in the 350,000 Infrastructure and Regulation in Network transport, electricity, and telecommunications development Utilities sectors to assess regulatory issues in network strategies utilities, proposing strategies for addressing these issues, and holding a series of workshops. Sudan Support to Telecom Providing capacity building (strategic planning 195,260 Capacity building Regulatory Institutions and classroom and on-the-job training) to in Sudan (North) strengthen the telecommunications regulatory authority in northern Sudan. Sudan Support to Telecom Providing capacity building (strategic planning 195,520 Capacity building Regulatory Institutions and classroom and on-the-job training) to in Sudan (South) strengthen the telecommunications regulatory authority in southern Sudan. Uganda Public-Private Partnership Developing a comprehensive policy, legal, and 325,000 Policy, regulatory, Unit Feasibility Study institutional framework for the development and institutional and implementation of public-private partnerships reforms as a mechanism for procuring and financing infrastructure projects and services. Regional Africa Development Sponsoring a competition to bring new 1,000,000 Infrastructure Market Competition lighting products to market to expand development lighting to the poor. strategies 51 Table A2.2 PPIAF activities by region, fiscal 2007 (continued) Sub-Saharan Africa, continued Country Activity Description Funding ($) Type of activity Regional African Forum for Sponsoring the participation of international 55,400 Capacity building Utility Regulators (AFUR) experts in AFUR's 4th Annual Conference, held Workshop on Strengthening in Livingstone, Zambia, in April 2007, to help Regulatory Governance governments examine issues around regulatory independence and accountability. Regional Development Bank of Developing an advanced, professional training 320,000 Capacity building Southern Africa: Advanced program covering the quantitative aspects of Training in PPI Project project appraisal and cost-benefit analysis for Appraisal public-private partnerships and PPIAF-supported research on methodologies for PPP project development. Regional Financial Feasibility Study Providing independent advice on prefinancial 750,000 Infrastructure for Inga III Hydroelectricity feasibility for a hydropower project, including development Facility and Related a business strategy to help raise the $5 billion strategies Transmission Corridor needed to finance it. Regional Infrastructure Consortium Developing a user-friendly guide to donor- 73,720 Infrastructure for Africa Secretariat: supported facilities that help with infrastructure development Review of Donor Financing project preparation, including a detailed survey strategies Instruments for Infrastructure of donor financial products, lending terms and conditions, and restrictions on use. Regional Infrastructure Funds Conducting a global review of financing 256,140 Infrastructure for Africa solutions for infrastructure, including lessons development learned, infrastructure funds and facilities strategies around the world, and key issues to be addressed in Africa. Regional Mtwara Corridor Analyzing potential infrastructure projects that 75,000 Infrastructure Supplemental Funding could benefit from public-private partnerships development for Transportation in the Mtwara Corridor (Malawi and Mozambique). strategies Regional PPP Blueprint for the Supporting the development of blueprints for 72,500 Infrastructure Implementation of Priority PPP structures to accelerate priority WAPP development West African Power Pool cross-border transmission projects. strategies (WAPP) Projects Regional PPP Workshop for Organizing a workshop in the Southern African 49,260 Capacity building Southern Africa Development Community (SADC) region to assess constraints to the flow of funds and projects, especially in postconflict countries. Regional Role of China in Studying the nature of China's involvement 74,200 Infrastructure Sub-Saharan Africa's in Sub-Saharan Africa's infrastructure sectors. development Infrastructure Development strategies Regional Survey of Private Sector Assessing what private companies need 130,000 Emerging Financing Requirements to invest in project development in Africa. best practices Regional Unlocking the Constraints Reviewing policies to help governments 163,000 Infrastructure to a Sustainable Eastern in East Africa find answers to the recurring development African Energy Market energy crisis in the region and supporting strategies stakeholder workshops. 52 Table A2.2 PPIAF activities by region, fiscal 2007 (continued) South Asia Country Activity Description Funding ($) Type of activity Afghanistan Design and Implementation Helping the Kabul municipal government assess 64,500 Policy, regulatory, of PPPs for Urban Sanitation options for public-private partnerships to and institutional Services in Kabul City outsource urban sanitation services, including reforms landfill and selected primary collection. India Assessment of Alternative Helping the government explore PPP models 75,000 Infrastructure Models for Capturing through a review of alternative models for development Land Value Appreciation capturing land value appreciation, using strategies from Transport the Mumbai Transharbor Link and affiliated Infrastructure Projects infrastructure projects as a case study. India Business Plan and PPP Developing a business plan and PPP strategy 172,500 Infrastructure Strategy for Maharashtra for the power transmission business in development State Electricity Transmission Maharashtra, including a strategic analysis, strategies Company a resource review, a prioritized investment plan, and funding options for projects. India Developing an Institution Providing support to the Institute for Regulation 60,000 Capacity building to Promote Regulatory and Competition (set up by a grassroots NGO, Capacity Building (CUTS) the Consumer Unity & Trust Society, or CUTS) for developing a business plan to deliver capacity-building solutions for a wide range of stakeholders in the area of regulation and competition. India Guidance for Empanelment Streamlining the process for the selection of 40,000 Capacity building of Advisors for Developing consultants by state governments and project and Implementing a authorities to increase its transparency and PPP Program ensure that the best advice is available for the development of PPP projects. India India River Basin Developing a river basin framework for efficient 324,900 Policy, regulatory, Hydropower Development hydropower development that facilitates and institutional Optimization Study coordinated and sustainable development reforms by private and public sector developers. India International Conference on Supporting a two-day conference in February 67,000 Emerging Meeting India's Infrastructure 2007 on how to scale up infrastructure services best practices Needs with Public-Private in India, featuring a review of international best Partnerships: International practices on public-private partnerships to provide Experience and Perspective guidance to the government. India Poverty and Infrastructure Supporting a pilot in the state of West Bengal 52,134 Infrastructure Mapping to create a geographic information system development (GIS) database with maps showing access strategies to infrastructure, agricultural and environmental conditions, and income levels, with the aim of helping the government and other stakeholders design evidence-based policies and local development programs for all. Pakistan Business Plan and Strategy Developing a business plan for the 360,000 Infrastructure for Infrastructure Project Infrastructure Project Financing Facility development Financing Facility (IPFF) to help address constraints on strategies long-term financing for infrastructure. 53 Table A2.2 PPIAF activities by region, fiscal 2007 (continued) South Asia, continued Country Activity Description Funding ($) Type of activity Pakistan Design and Implementation Designing and implementing a least-cost 350,000 Pioneering of a PPP Project for Rural subsidy scheme to facilitate effective use transactions Telecommunications Services of a universal service fund for expansion of rural telecommunications services by the private sector. Sri Lanka Development of Nationwide Conducting a feasibility study aimed 147,500 Infrastructure Communications Backbone at facilitating public-private partnerships development Network through PPPs to develop a nationwide fiber-optic strategies communications backbone network. Regional Capacity-Building Support Providing continued support to SAFIR to help 200,000 Capacity building to the South Asia Forum implement its program for fiscal 2007­08 for Infrastructure Regulation and develop a medium-term sustainable (SAFIR) business plan based on an assessment of its potential role in supporting regulatory capacity building in South Asia. Regional Public Opinion Research Conducting opinion research with private 56,000 Policy, regulatory, to Better Understand investors, financiers, and operators from within and institutional Private Sector Interests and outside South Asia to help the region's reforms and Perceptions Related governments better understand the private to Investing in Infrastructure sector's interest, attitudes, and perceptions with respect to investing in infrastructure in South Asian countries. East Asia and Pacific Country Activity Description Funding ($) Type of activity Cambodia Provision of Two On-Site Providing two training courses on electricity 74,900 Capacity building Power Regulation Training regulation to help enhance the technical Courses for the Electricity capacity of staff at the Electricity Authority Authority of Cambodia of Cambodia. China Maintenance of Rural Roads Supporting the piloting of rural road maintenance 156,450 Infrastructure under the Mechanism by community-based microenterprises to improve development of Community-Based efficiency and results in two pilot provinces, strategies Microenterprises Jiangxi and Shaanxi. China Rural Telecommunications Preparing reports and a stakeholder workshop 290,000 Infrastructure Infrastructure Development: on international practices as well as a strategy development International Best Practices for developing and implementing rural strategies telecommunications infrastructure. Indonesia Feasibility Study Conducting a feasibility study to present 371,352 Infrastructure for a Nationwide a business case and potential business development Telecommunications models for a nationwide, high-speed strategies Backbone Network telecommunications backbone network. Indonesia Geothermal Power Providing the government with strategic advice 75,000 Infrastructure Development on how it can address the pricing and incentive development issue, and conduct successful transactions, strategies to develop geothermal energy. 54 Table A2.2 PPIAF activities by region, fiscal 2007 (continued) East Asia and Pacific, continued Country Activity Description Funding ($) Type of activity Mongolia Options Study for Studying options for improving access to water 257,200 Policy, regulatory, Contracting Out and sanitation services in ger areas (informal and institutional Management in settlements) and for enhancing the operational reforms Water Supply and efficiency and effectiveness of water kiosks, Sanitation Services for tankers, and bathhouses. Ger Areas in Ulaanbaatar Mongolia Outreach and Supporting the communication and consultation 60,350 Consensus building Communication process around a newly released comprehensive for the Mongolia infrastructure strategy. Infrastructure Study Philippines Assistance to the Energy Building the capacity of the Energy Regulatory 74,600 Policy, regulatory, Regulatory Commission Commission to review the allegations of abuse and institutional on Market Abuse in the in the wholesale electricity spot market. reforms Wholesale Electricity Spot Market Philippines Development of a Solid Developing a subsidy framework to increase the 72,820 Policy, regulatory, Waste Services Subsidy incentives of local government units to undertake and institutional Framework solid waste management projects and investments reforms to meet the requirements of the ecological Solid Waste Management Act. Philippines Review of Private Sector Reviewing the private sector's experience as 47,500 Infrastructure Participation Experience developer and operator of urban water supply development in Urban Water Supply utilities in the Philippines, identifying the main strategies factors that have limited its involvement in urban areas outside Metro Manila, and recommending measures to provide an enabling environment for private participation. Thailand Rural Water Supply Pilot Supporting a pilot project to help improve the 163,400 Infrastructure Demonstration Project, involvement of communities in the management, development Stage 1 operation, and maintenance of their water strategies supply system. Timor-Leste Study on the Helping the government commercialize the 40,000 Policy, regulatory, Commercialization of state-owned utility and improve its governance and institutional Electricidade de Timor-Leste with the aim of strengthening its performance reforms and facilitating private involvement. Vietnam Development of Power Developing a standard tender framework for 493,520 Policy, regulatory, Market and Competitive thermal independent power producers to help and institutional Tender Framework for attract private investment in power generation reforms Thermal Independent to respond to Vietnam's rapidly growing Power Producers demand for electricity. Vietnam Development of Transmission Assisting the Electricity Regulatory Authority 46,500 Policy, regulatory, and Single-Buyer Licenses of Vietnam in developing the transmission and institutional for a Competitive and bulk supply licenses needed to establish reforms Generation Market a competitive generation market. Vietnam Hanoi Water Business Assisting the Hanoi Water Business Company 74,160 Infrastructure Company Nonrevenue in assessing water losses in low-pressure areas development Water Reduction Study and defining possible options for reducing strategies nonrevenue water. 55 Table A2.2 PPIAF activities by region, fiscal 2007 (continued) East Asia and Pacific, continued Country Activity Description Funding ($) Type of activity Vietnam Hanoi Water Leakage Helping the Hanoi Water Business Company 54,420 Infrastructure Reduction Study assess physical leaks from water supply networks development and estimate savings that could be achieved in strategies selected supply zones, to complement and feed into the ongoing work to identify options for reducing nonrevenue water in Hanoi. Vietnam Private Sector Participation Helping to pilot an approach to developing 74,000 Infrastructure in District Town Water water supply in district towns that involves development Supplies in Binh Dinh awarding contracts to design and build water strategies Province systems, then contracting out the operations to domestic private operators. Central Asia and Europe Country Activity Description Funding ($) Type of activity Armenia Concessioning of Preparing recommendations for restructuring 75,000 Policy, regulatory, Armenian Railways the rail sector to increase its efficiency and and institutional market-responsiveness, with a focus on reforms amendments to the draft railway law prepared by the government to facilitate a concession and on principles of safety, tariffs, access, service oversight, and concession terms. Armenia Design of Universal Service Designing a universal service fund to help 354,800 Infrastructure Fund for the Telecom Sector increase access to basic telecommunications development services through private participation. strategies Armenia Road Show for Supporting the government's efforts to plan 71,200 Pioneering Concessioning and carry out the road show for concessioning transactions of the Railway Armenian Railways. Armenia Transaction Advisory Assisting in preparing and implementing 470,000 Pioneering Services for a the entire process for concessioning Armenian transactions Railway Concession Railways--from refining the strategy to preparing a draft concession agreement, prequalifying potential investors, awarding the concession, and transferring operations to the concessionaire. Bosnia and Energy Sector Study Assisting the government in planning, 75,000 Infrastructure Herzegovina Stakeholder Consultation organizing, and facilitating consultation development and Review with stakeholder groups as part of an effort strategies to finalize the national energy strategy. Bosnia and Framework and Capacity Helping the Ministry of Communications and 255,400 Infrastructure Herzegovina to Manage Private Transport strengthen the institutional framework development Participation in Corridor Vc for, and the capacity to facilitate, private strategies participation in the road sector; and assisting in an economic and financial viability review of motorways in Corridor Vc to identify segments suitable for private participation. 56 Table A2.2 PPIAF activities by region, fiscal 2007 (continued) Central Asia and Europe, continued Country Activity Description Funding ($) Type of activity Macedonia, Strategy and Action Plan Developing a strategy and action plan 267,310 Infrastructure FYR for Reforms in Communal to accelerate structural and policy reform development Services in municipal services with the aim of improving strategies the performance of the municipal service enterprises, and providing guidance on opportunities for private participation. Serbia, Designing Infrastructure Assisting in reforming the rail sector and 330,700 Policy, regulatory, Republic of Access Regime, Tariff improving the competitiveness of Zeleznice and institutional Framework, and Network Srbije, the state-owned railway, while reforms Statement for the Rail Sector enhancing the prospects for private investments in rolling stocks and rail operations by providing an access regime that is transparent and stable. Turkey Strengthening and Supporting a study and stakeholder workshops 330,000 Policy, regulatory, Harmonization of the to assist the government in consolidating, and institutional Legal, Policy, and strengthening, and harmonizing the legal, reforms Institutional Framework policy, and regulatory framework for public- for Second-Generation private partnerships and in setting up a PPP PPP Projects unit for all infrastructure sectors. Regional Comprehensive Energy Formulating a comprehensive strategic 74,992 Consensus building Action Plan for Central framework for regional cooperation in the Asia Regional Economic energy sector, including policy and regulatory Cooperation Program initiatives as well as key investments needed to achieve the governments' goals for regional cooperation. Regional Review and Good Practice Reviewing key lessons from recent PPP projects 50,000 Emerging Guidance for Transport in the transport sector in and outside the region, best practices PPP Projects with a primary emphasis on countries of Southeast Europe and Central and Eastern Europe; and providing guidance to decision makers on improving the preparation and implementation of similar PPP activities in the future. Latin America and the Caribbean Country Activity Description Funding ($) Type of activity Guatemala Guatemala Credit Designing and piloting a credit enhancement 75,000 Infrastructure Enhancement Facility mechanism that can leverage private financing development of basic infrastructure services for informal strategies and low-income communities. Haiti Modernization of the Legal Supporting a series of reports, draft legislation, 315,600 Policy, regulatory, and Regulatory Framework and stakeholder workshops to provide guidance and institutional for Telecommunications to the government in the drafting and early reforms implementation of a modern legal and regulatory framework for the telecommunications sector, with the aim of helping to increase private participation. 57 Table A2.2 PPIAF activities by region, fiscal 2007 (continued) Latin America and the Caribbean, continued Country Activity Description Funding ($) Type of activity Mexico Banobras Realignment Reviewing the organizational structure and 306,400 Infrastructure Strategy operational capabilities of Banobras, the development state-owned development bank, with a view strategies to recommending improvements that could help catalyze infrastructure financing with private participation. Regional Support to the Association Helping to increase the sustainability of 360,000 Capacity building of Water and Sanitation ADERASA through the creation of a secretariat Regulatory Entities of the and continued training, benchmarking, and Americas (ADERASA), good practices around stakeholder consultation. Phase 2 Middle East and North Africa Country Activity Description Funding ($) Type of activity Egypt, Capacity Building and Supporting training and implementation 370,000 Capacity building Arab Rep. of Implementation Support for a government-financed performance-based for Performance-Based contract for regular maintenance of about Road Maintenance Contracts 100 kilometers of highway as a pilot operation. Egypt, PPP Conceptual Framework Preparing a conceptual framework and 75,000 Infrastructure Arab Rep. of for a Water Treatment Plant transaction model for a public-private development in the New Cairo Area partnership in the water supply and wastewater strategies sector in New Cairo. Yemen, Diagnostic Study for Preparing a diagnostic study to lay the 74,900 Infrastructure Republic of the Establishment of groundwork for establishing public-private development Public-Private Partnerships partnerships in the road sector, including strategies in the Road Sector charting a strategy and plan of action for getting PPP projects under way. Yemen, Domestic Gas Market Supporting a workshop to build the capacity 74,928 Policy, regulatory, Republic of Development Workshop of the government to develop an institutional and institutional framework for the gas sector. reforms Yemen, Identification of Suitable Supporting stakeholder consultations 227,700 Infrastructure Republic of Contractual Arrangements on options for improving the delivery of development for Water and Sanitation water and sanitation services in major cities. strategies 58 Table A2.2 PPIAF activities by region, fiscal 2007 (continued) Global Country Activity Description Funding ($) Type of activity Global Central Asia­South Asia Assisting the multicountry working group 380,000 Infrastructure Regional Electricity Trade in exploring the potential for electricity trade development (CASA-1000): Design of between Central and South Asia and in strategies Institutional, Financial, identifying private investors and forms of Risk Mitigation, and private participation; creating the necessary Legal Framework institutional and financial framework; and analyzing risks and a mitigation strategy for the electricity trade. Global Infrastructure and Law Rolling out the Infrastructure and Law Web site 196,960 Emerging best Web Site, Phase 2: Rollout both internally and externally and providing practices related training sessions and seminars. Global Land-Related Private Reviewing opportunities for mobilizing private 75,000 Emerging best Finance in Urban finance for urban infrastructure services using practices Infrastructure such tools as land leasing and sales and developer payments. Global Study on Contingent Documenting and analyzing international 60,200 Emerging best Liability Management good practice in managing contingent liabilities practices associated with private participation in infrastructure projects. Global Update of the Toolkit for Updating the toolkit for public-private 435,000 Emerging PPPs in Highways partnerships in highways to include new best practices case studies, new developments, and other materials. 59 Annex 3 Publications and resources Trends and Policy Options series · Outsourcing Regulation: When Does It Make Sense and How Do We Best · Review of Risk Mitigation Instruments for Manage It? Infrastructure Financing and Recent Trends and Developments · Unsolicited Infrastructure Proposals: How Some Countries Introduce · Regulatory Governance in Infrastructure Competition and Transparency Industries: Assessment and Measurement of Brazilian Regulators Cosponsored publications · Developing Country Investors and Operators in Infrastructure · New Models for Universal Access to Telecommunications in Latin America · How Profitable Are Infrastructure (English and Spanish) Concessions in Latin America? Empirical Evidence and Regulatory Implications · Infrastructure in Latin America and the Caribbean: Recent Developments · The Private Sector's Role in the Provision and Key Challenges (English and Spanish) of Infrastructure in Post-Conflict Countries · Cross-Border Infrastructure Toolkit Working Papers · The Challenge of Reducing Non-Revenue Water (NRW) in Developing Countries: · Expert Panels in Regulation of How the Private Sector Can Help--A Look Infrastructure in Chile at Performance-Based Service Contracting · Evaluating Regulatory Decisions · Infrastructure Project Preparation and Sector Outcomes in Infrastructure Facilities: Africa User's Guide (French Industries: Results from Africa and and English) Other Developing Countries · Explanatory Notes on Key Topics in · Infrastructure Regulation in Developing the Regulation of Water and Sanitation Countries: An Exploration of Hybrid Services and Transitional Models · Philippines: Meeting Infrastructure Publications in each section are listed in order of publication, Challenges starting with the most recent. All PPIAF publications are available online at http://www.ppiaf.org. 60 · A Strategic Framework for Implementation of Gridlines Energy Efficiency Projects for Indian Water Utilities Multisector · Connecting East Asia: A New Framework for · Relying on Expert Panels to Help Settle Regulatory Infrastructure Disputes: Lessons from Chilean Experience · A Model for Calculating Interconnection Costs · The African Project Preparation Gap: Africans in Telecommunications (English and French) Address a Critical Limiting Factor in Infrastructure · Analysis of Power Projects with Private Participation Investment under Stress · Revival of Private Participation in Developing · Establishing a Legal and Regulatory Framework for Country Infrastructure: A Look at Recent Trends the Downstream Gas Sector in Vietnam and Their Policy Implications · Electricity Sectors in CAREC Member Countries: · How to Improve Regulatory Transparency: A Diagnostic Review of Regulatory Approaches Emerging Lessons from an International Assessment and Challenges · Financing Infrastructure in Africa: How the Region · Infrastructure for Poor People: Public Policy for Can Attract More Project Finance Private Provision · Reform, Private Capital Needed to Develop · New Designs for Water and Sanitation Transactions Infrastructure in Africa: Problems and Prospects for Private Participation · Contracting for Public Services: Output-Based Aid and Its Applications (English and Spanish) · Lifting Constraints to Public-Private Partnerships: The Way toward Better Infrastructure Services · Infrastructure Service Provision in El Salvador: in South Asia Fighting Poverty, Resuming Growth--Strategy Report (English and Spanish) · Responding to Surging Demand for PPIAF Assistance in Africa: A Response Combining Traditional and · Providing and Expanding Water Provision and Solid New Approaches Waste Collection Services in Peri-Urban and Rural Areas: The Role of Small-Scale Providers--The Case · Private Participation in Infrastructure in Europe of El Salvador and Central Asia: A Look at Recent Trends · What It Takes to Lower Regulatory Risk in Toolkits Infrastructure Industries: An Assessment and Benchmarking of Brazilian Regulators · Toolkit on Market-Based Approaches in Private Sector Provision of Bus Services · Designing and Using Public-Private Partnership Units in Infrastructure: Lessons from Case Studies around · Port Reform Toolkit: Effective Support for the World Policymakers and Practitioners (2nd ed.) · Unsolicited Infrastructure Proposals: How Some · Approaches to Private Participation in Water Countries Introduce Competition and Transparency Services: A Toolkit · Recent Trends in Risk Mitigation Instruments · Labor Issues in Infrastructure Reform for Infrastructure Finance: Innovations by Providers · A Guide for Hiring and Managing Advisors for Opening New Possibilities Private Participation in Infrastructure 61 · Matching Regulatory Design to Country Transport Circumstances: The Potential of Hybrid and · Port Reform in Nigeria: Upstream Policy Reforms Transitional Models Kick-Start One of the World's Largest Concession Programs · Big Challenges, Small States: Regulatory Options to Overcome Infrastructure Constraints · The Growing and Evolving Business of Private Participation in Airports: New Trends, New · The Role of Developing Country Firms in Actors Emerging Infrastructure: A New Class of Investors Emerges · Is the Public Sector Comparator Right for Developing Solid waste Countries? Appraising Public-Private Projects in · Managing Municipal Solid Waste in Latin America Infrastructure and the Caribbean: Integrating the Private Sector, Harnessing Incentives Energy · Armenia Travels the Bumpy Road to All-Day Learning tools Electricity Supply: How Perseverance Pays Off in Power Sector Reform · Body of Knowledge on Utility Regulation (Available on CD-ROM or online; provides key concepts, case · Private Participation in Electricity: The Challenge studies, and links to more than 300 resources.) of Achieving Commercial Viability and Improving Services · Introduction to Infrastructure Reform (Includes video documentary, interactive training modules, · Reaching Unserved Communities in Africa: Can graphical summaries, and knowledge tests.) Small-Scale Private Service Providers Save the Day? · Financial Modeling of Regulatory Policy: Transport Infrastructure (CD-ROM) Water · Private Participation in Water: Toward a New · Financial Modeling of Regulatory Policy: Water Generation of Projects? and Electricity Distribution Services (CD-ROM) · Using Management and Lease-Affermage Contracts for Water Supply: How Effective Are They in CD-ROMs Improving Service Delivery? · PPIAF-Supported Assistance for the National · Meeting Water Needs in Vietnam: How Engaging Telecommunications Commission in Thailand Communities Can Help Lead to Viable Projects · Private Infrastructure for Poor People: A Working Resource Guide Telecommunications · Expanding the Frontiers of Telecom Markets PPIAF Country Framework Reports through PPPs in Peru: Lessons for Pro-Poor Initiatives from Peru PPIAF Country Framework Reports provide a compre- hensive overview of issues around infrastructure reform. · Transforming Telecoms in Afghanistan: Expanding Reports are available for Angola, Bangladesh, Cambo- Affordable Access by Introducing Competition dia, Honduras, India, Lesotho, Mexico, the Philippines, Rwanda, Uganda, and Vietnam. 62 Videos in the energy, telecommunications, transport, and water and sewerage sectors. It is a joint product of the World · Afghanistan: Ringing in the Future (A story of the Bank's Infrastructure Economics and Finance Depart- transformation of the telecommunications sector.) ment and PPIAF. · Switch: The Story of Energy Reforms in Armenia Publications available in Spanish only PPI Database · Honduras: Plan Estrategico de Modernizacion del The Private Participation in Infrastructure (PPI) Project Sector Agua Potable y Saneamiento Database has data on more than 3,800 projects in 150 · Esquemas de Financiamiento del Sector Agua en low- and middle-income countries. It is the leading source México: Lecciones de la Experiencia Nacional e of PPI trends in the developing world, covering projects Internacional 63 Acronyms and abbreviations BOT Build-operate-transfer CAREC Central Asia Regional Economic Cooperation Program CUTS Consumer Unity & Trust Society ECOWAS Economic Community of West African States GDP Gross domestic product ICA Infrastructure Consortium for Africa IPFF Infrastructure Project Financing Facility (Pakistan) NEPAD New Partnership for Africa's Development NGO Nongovernmental organization PPI Private participation in infrastructure PPIAF Public-Private Infrastructure Advisory Facility PPP Public-private partnership PURC Public Utility Research Center SADC Southern African Development Community WAPP West African Power Pool 64 Notes 1. Includes private participation in infrastructure (PPI) laws and 4. Includes PPI laws and regulations developed and PPI sector regulations developed and PPI sector reform strategies support- reform strategies supported as well as pending activities. ed as well as pending activities. 5. Marianne Fay and Mary Morrison, Infrastructure in Latin 2. Unless otherwise specified, data on trends in private participa- America and the Caribbean: Recent Developments and Key tion in infrastructure are from the World Bank­PPIAF Private Challenges (Washington, DC: World Bank, 2006). Participation in Infrastructure (PPI) Project Database. For de- 6. Funds from the Asian Development Bank, Japan, and the World tails on the database, including what the data cover, see the Bank are kept in separate trust funds because of variations in PPIAF Web site (http://www.ppiaf.org). the terms of their contributions. 3. IDA countries are those that had a per capita income in 2006 of less than $1,065 and lack the financial ability to borrow from IBRD. IDA loans are deeply concessional--interest-free loans and grants for programs aimed at boosting economic growth and improving living conditions. IBRD loans are non- concessional. 65 How to contact PPIAF PROGRAM MANAGEMENT UNIT EAST ASIA AND PACIFIC c/o The World Bank REGIONAL COORDINATION OFFICE 1818 H Street NW World Bank Office Manila Washington, DC 20433 Floor 23 Taiwpan Place USA F. Ortigas Jr. Rd., Ortigas Center Tel: (+1) 202 458 5588 Pasig City, Metro Manila Fax: (+1) 202 522 7466 Philippines E-mail: ppiaf@ppiaf.org Tel: (+63 2) 637 5855 (+63 2) 917 3000 EAST AND SOUTHERN Fax: (+63 2) 637 5870 AFRICA REGIONAL E-mail: manilarco@ppiaf.org COORDINATION OFFICE Kenya Re Towers WEST AND CENTRAL AFRICA Upper Hill, P.O. 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