Transcript DFID involvement in Private Sector Infrastructure

International Private Sector Infrastructure
Catalysing private investment in infrastructure in the poorest
developing countries for:
- Economic growth
- Better services for the poor
Gavin McGillivray
Head Private Sector Department
UK Department for International Development (DFID)
4 May 2011
Background
In developing countries, especially the poorer ones;
•
Hundreds of millions of poor people lack access to decent
basic services – electricity, water & sanitation,
communications and transport
•
Inadequate infrastructure disadvantages private enterprise
and puts a severe brake on economic growth
•
Governments have nowhere near sufficient resources to
extend and upgrade infrastructure to meet the needs of
their burgeoning populations
•
There are opportunities to catalyse private investment to
help meet some of these needs
What prevents private investment in infrastructure?
• Outdated laws, regulations & policies
• Weak government capacity to understand and engage
with private investors
• Lack of long-term lending, especially in local currency
• Paucity of well-structured projects to invest in
and, to ensure that privately financed services reach the poor
• Need for clear targeting in design, and
• Well-conceived subsidies
Making infrastructure finance work for poor countries
Reaching
The Poorest
Financing
Enabling
Environment
Project
Preparation
TAF
Asia
Africa
PSI Structure
Private Infrastructure
Development Group - PIDG
Other PSI Facilities
Programme Management
Unit (PMU)
PIDG Trust
Other Trusts
Asia
Africa
PIDG Facilities
TAF
Affiliated
Programmes
Public-Private Infrastructure
Advisory Facility (PPIAF)
PPIAF support has resulted in:
• the passing of over 51 laws and regulations
• the establishment of over 146 sector reform
strategies
• the establishment or strengthening of over 74
institutions
Example: Telecommunications, Afghanistan
• $468,800 in grant assistance to support the
development of a regulatory framework
• Rapid rollout of competitive services, with tariffs falling
95% since 2002
• The telecoms sector has attracted over $1.3 billion in
private investment
Electrical distribution network, Kabul
Results and Impacts
Bugoye Hydropower Plant, Uganda.
Emerging Africa Infrastructure Fund
Cotonou Port, Benin.
DevCo
Results and Impacts
Antara Cold Storage, Vietnam.
InfraCo
Ackruti City Slum
Development, India
GuarantCo
PIDG Inputs and Outputs
• Total donor spend c.$500m
• 46 projects completed
• $9.4 billion of private investment committed
• 12 million already receiving new or better services
• Est. 30m people will receive new or better services
from projects that have reached financial close
• 29 further projects under development, plus more in
pipeline.
Distinctive Features of Approach
1. Capitalise on best ideas of group of like-minded agencies
within flexible structure
2. Focus on sector-specific government and market failures that
prevent private investment
3. Smart, catalytic use of donor capital to correct these failures –
and help build financial markets that work for the poor
4. Use of professionally-managed, professionally-governed
entrepreneurial facilities
5. Work within geographical and policy frameworks that focus
energies on generating outputs that benefit the poor
Opportunities
1. Scale up existing programmes
2. Extend programmes to cover related areas, eg
•
Climate-friendly infrastructure
•
Agriculture / agribusiness related infrastructure
3. Adopt similar approaches in other sectors, eg
•
Agriculture & agribusiness
•
Tourism
•
Education
•
Health