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Development Account Projects

Building capacity and facilitating private sector involvement for infrastructure provision in less developed countries

Background:

Public sector finance and arrangements alone can not fulfil the demands for infrastructure provision in low income countries. Infrastructure improvements are needed to accelerate economic growth and reduce poverty. Bridging this finance gap, which some estimates put at around $200 billion in the Asia-Pacific region, is essential if progress is to be made towards the MDGs.

In the current economic and financial climate, the capital base of national governments and development banks is significantly limited while global financial markets are more volatile. Governments and development banks need to act more as catalysts rather than funders, in order to leverage private capital and manage the significant risks associated with private financing.

The facilitation of the requirements for the private sector to be involved requires the public sector to progress changes to regulatory, legislature and public sector processes to enable banks to gain comfort in an acceptable level of risk to capital and contractors’ consortiums gain comfort that the public sector will deliver the necessary procedures to avoid shocks.

This project is designed to be an action project to achieve tangible results in getting less developed countries ready for private sector engagement. It will address the above issues and meet the requests made in various Commission resolutions. In so doing, it will contribute to acceleration of progress towards achieving the Millennium Development Goals as well as the goals contained in the Monterrey Consensus on Financing for Development and its subsequent Doha Declaration.

Objective:

To strengthen the capacities of governments to engage the private sector in infrastructure provision.

Expected accomplishments:

  • Improved preparedness of government and commercial sector for private sector involvement in the delivery and operation of infrastructure through the PPP mechanism.
  • Improved availability of and access to, information and knowledge for the provision of infrastructure and services utilising PPPs
  • Enhanced capacity of relevant agencies to develop economically and financially viable PPP projects

Implementation status:

In progress.