ADB fund seen to boost rollout of PPP projects

by Cai U. Ordinario | January 26, 2016

 

 

THE Philippine government now has an additional source of funds to jump-start or fast-track the implementation of public-private partnership (PPP) projects with the launch of a regional multidonor trust fund, dubbed as the Asia-Pacific Project Preparation Facility (AP3F), on Monday.

The $73-million AP3F, to be managed by Manila-based Asian Development  Bank (ADB), covers project structuring, capacity-building and creation of PPP policy  and framework, as well as monitoring and restructuring of individual deals. 

“Through this facility, we are further assisting the public sector to structure PPP green field projects to make them viable and bankable. Uniquely, this facility also supports ongoing brown field projects where public sector needs to monitor their progress, and to restructure them if the projects are not on the track as initially planned,” ADB Office of Public-Private Partnership Head Ryuichi Kaga told the BusinessMirror in an e-mail.

The ADB facility is similar to the Philippines’s own Project Development Monitoring Facility (PDMF).   

For her part, PPP Center Executive Director Cosette Canilao told the BusinessMirror that the launch of the AP3F also means additional financial resources for the government’s line agencies, particularly in PPP preparation.

“It will increase the avenues by which implementing agencies or the government can get help in terms of project preparation,” Canilao said.

Canilao added that project-preparation financing for PPPs can be obtained from various sources, such as the national budget, the PDMF and multilateral and bilateral agencies.

She said the departments of Public Works and Highways and Transportation and Communications have recently obtained funding from the International Finance Corp. and the US Agency for International Development for the project-preparation needs of some of their PPPs.

Having additional sources of funds for preparing PPP projects would help jump-start key infrastructure projects as both the PDMF and the budget of line agencies are limited. The PDMF is a revolving fund that helps in financing feasibility studies and other studies needed in project preparation. 

In a statement, the ADB said the AP3F is a multi-donor trust fund that seeks to help developing Asia and the Pacific prepare, structure  and place bankable PPP projects in the market.

The facility is funded by commitments from the governments of Japan, Canada and Australia to contribute $40 million, CA$20 million and AU$10 million respectively.

ADB added that it will also contribute $10 million to the facility. The Manila-based lender said more donors are expected to contribute to the fund.

The facility’s primary objective is project-preparation support for governments, including due diligence and advisory work covering technical, financial, legal and regulatory issues, as well as safeguards.

It can also provide capacity and policy-development support and project-operation support, including monitoring and restructuring work for existing projects.

“AP3F exemplifies ADB’s broader role as a development partner to governments that goes beyond the financing of Asia’s infrastructure,” the ADB said.   

The new facility will prioritize PPP infrastructure projects with regional cooperation, sustainable development and climate-change elements.

The ADB’s efforts parallel those of the Group of Twenty (G20) nations and the Asia-Pacific Economic Cooperation (Apec) forum, which both stress the importance of attracting private-sector participation in infrastructure as a means to promote growth, expand trade and improve livelihoods.

In 2014 the G20’s finance ministers endorsed the Global Infrastructure Initiative which is aimed at increasing long-term private investment in infrastructure. AP3F is also part of Apec’s 2015 Cebu Action Plan.

Source: www.businessmirror.com.ph