The views expressed in this presentation are the views of the author and do not necessarily reflect the

views or policies of the Asian Development

Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee
the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not
necessarily be consistent with ADB official terms.

Office of Public-Private Partnership (OPPP)

2 August 2018
 Challenges to PPP in Asia and the Pacific

• Inconsistent and insufficient political commitment

Advocacy and
• Limited or lack of understanding about PPP contracts, risk allocation,
capacity
government’s role & responsibility
development • Lack of government capacity for project identification / PPP conceptualization

• Underdeveloped regulatory frameworks & unclear implementation

Enabling • Limited coordination among central ministries / regional governments
environment • Delay in land acquisition and insufficient compensation / resettlement
• Delay of approval / permit processes

• Limited capacity for project and budget implementation

Project • Limited capacity for project selection and prioritization / bid management
development • Limited fund availability for deal structuring, pre-feasibility study, advisory
• Poor quality project viability assessment with weak assumptions/forecasts

• Lack of long-term local currency liquidity, e.g., weak banking sector, lack of
project bond market / institutional investors’ interest in asset class
Project
• Lack of secondary or securitization market for project finance assets
financing • Recent regulations (Basel III) constrain banks’ to provide project finance
• Private finance for DMC risks requires credit enhancement / co-financing

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 ADB’s PPP operational framework and modalities

Pillar 1 Pillar 2 Pillar 3 Pillar 4

Advocacy and capacity Enabling

Project preparation Project financing
development environment

• Create awareness
• Invoke leadership
• Identify PPP potential in
sector planning and the
private sector
development agenda
• Develop capacity of
Government
• Enhance external
knowledge management
links
• Develop policy, legal, • Assist in the development
regulatory and of pathfinder projects
institutional framework to • Provide support (including
facilitate, guide and advisory support)
manage the development throughout the process
of PPPs (country and from structuring to bid
sector specific) management and
contract award/financial
close.
• Provide long-term debt
financing including local
currency
• Catalyze commercial
financing by equity, debt
and guarantees.
• Provide public sector
financial support through
schemes to ensure
viability and cash flow
sustainability.

ADB is unique in having comprehensive operational modalities to support PPP

Knowledge
dissemination, training
PPP Act; Streamlined
Feasibility studies Sovereign financing
PPP regulation
PPP units; Planning Non-sovereign
Preparation support
and coordination financing
Transaction Advisory
Services

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 How can ADB promote and catalyze more PPPs?
RDs: Sovereign Financing & Assistance (Loan, TA etc…)
Donors

OPPP: 7 DMC Government /

Transaction Advisory Ministry of Finance / Line Ministry
Services 1 National Project
Preparation Facility

On-lending program
Sovereign PPP project support
Donor-funded • Project Viability Gap Funding
facilities State-owned • Project availability payment
Financial intermediary • Funding of government debt/equity

PSOD: 4 3 Public Sector 2

Non-Sovereign Contracting Authority / Line Ministry
Financing

- Project Debt / Equity

- Project Guarantees Publicly-financed
5 Infrastructure
PPP
Private Financiers Project Company
& Investors
Private Sector
Private Investment O&M Service
Fund/Vehicle
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BOT / Concession Service/Mgmt Contract
 Examples of sovereign support for PPPs

Philippines
• ADB’s Project Development and Monitoring
People’s Republic of China
Facility allows PPP Center to pay for feasibility
• ADB is supporting Yichang Elderly Care
studies and transaction support
Project.
• ADB is supporting capacity building of LGUs

Armenia
• ADB provided loans to support
Armenian Water and Sewerage Viet Nam
Company with performance based • ADB assisted MPI on new PPP Decree,
management contract. which was approved in March 2015
• ADB is working on further support for a
project development facility
India
• 21 PPP cells established across the
country; over $81 billion of projects Papua New Guinea
implemented via PPP • ADB supported development of
• Long history of ADB support through PPP Act established in
TA, loans, and credit enhancements September 2014; sets stage for
• On-lending program with IIFCL PPP Center and project pipeline
• Hybrid Annuity for State Road • ADB supported IPBC for Lae
Development Port PPP feasibility study

Sri Lanka Bangladesh

• ADB financed infrastructure for expanding • ADB helped PPP office prepare PPP Guidelines; approved
Colombo port to invite private sector in 2015
operators. • More than 40 projects identified and approved as PPP
pipeline projects

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 OPPP Transaction Advisory Services Mandates

As of July 2018, OPPP is working on 16 TAS mandates and one MOU in Indonesia.

Viet Nam
Kazakhstan • Ho Chi Minh City Ring Road 3; $727 mil (Dec 2016)
• Karaganda University Hospital: $60 mil (Dec 2016) • Da Nang Solid Waste Management: $200 mil (Jul 2017)

Pakistan Philippines
• Lower Spat Gah Hydropower: $1 bil (Feb 2018) • North-South Railway Project (May 2015) – mandate
being renegotiated for PNR Commuter
Sri Lanka • New Clark City (National Government Administrative
• Colombo Port East Container Terminal: $500 mil Center): $250 mil (Sep 2017) – completed in Feb 2018
(Feb 2016) – canceled in Feb 2018 • Batangas LNG Hub: $2 bil (Jan. 2018)
• New Clark City Water Project: $200 mil (Mar 2018)
Bangladesh • New Clark City Power Project: $125 mil (Mar 2018)
• Rampura-Amulia-Demra Toll Road (Dhaka): $260 mil
(Jun 2016) Papua New Guinea
• Dhaka Bypass: $350 mil (Nov 2017) • Jacksons International Airport (Port Moresby): $370 mil
• Petronet LNG Terminal: $1 bil (Feb 2018) (Feb 2017)

Myanmar Malaysia
• Strategic and Transaction Advisory on Transport • Melaka Street Lighting Energy Efficiency: $50 mil (Jul 2016)
PPPs (Feb 2017)
• Strategic and Transaction Advisory for Urban Cambodia
Infrastructure in Yangon Region (Mar 2017) • National Solar Park Program: $100 mil (Jun 2017)

Indonesia
• MOU with the Ministry of Transportation for project
identification and capacity development (Nov 2017)

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 Typical project team structure
ADB acts as a single point of interface with the client and manages various experts under
one umbrella.

Client

ADB Core Transaction Advisory Team

TAS Project Team Country Unit

Leader Resident Mission

Commercial Unit Legal Unit Technical Unit

Financial Technical
External Counsel
Consultant Consultant

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 Asia Pacific Project Preparation Facility (AP3F)

AP3F’s objective is to assist Developing Member Country governments and their public sector agencies
in preparing and structuring infrastructure projects with private sector participation

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 AP3F Approved Applications since 2016

Since its launch, AP3F has been supporting 22 applications, with robust project pipeline and strong interest
by DMCs. Total amount of approvals is $17.1 million, equivalent to 23.4% of the total fund commitment.

Timor-Leste
Georgia • Capacity building for efficient
Capacity building for gas monitoring of Tibar Bay Port
pricing policy and a gas project: $287 mil
storage facility • Solid waste management in Dili

Azerbaijan
Student accommodation in Papua New Guinea
Baku Jacksons International Airport (Port
Moresby): $371 mil
Indonesia
Kazakhstan
Capacity building and project definition for
• Energy efficiency for ESCO Samoa
social infrastructure PPPs
Modalities • Formulation of a power tariff
• Shymkent and Saryagash Philippines • Capacity building for the Ministry
bypass roads: $150 mil • Solid waste management in Cebu: $50 mil of Public Enterprises
• Astana waste water treatment • Capacity building for PPP Center • PPP solutions for the Electric
plant: Power Corporation
Thailand
Capacity building for seaport PPP program Solomon Islands
Kyrgyz Republic
• Project definition for small HPPs Creation of a PPP center
Myanmar
Project restructuring of four road BOT Cook Islands
Bangladesh concessions Capacity building for Ministry of
• Dhaka road bypass: $350 mil Infrastructure Cook Islands
• Capacity building for PPP Bhutan
Authority Capacity building for the PPP and Loans Unit

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 Contact information

ADB Headquarters Yoji Morishita

6 ADB Avenue, Mandaluyong City Head
1550 Metro Manila Office of Public-Private Partnership
Philippines Tel: +63-2-632-6112
Email: ymorishita@adb.org

Takeo Koike
Director
Office of Public-Private Partnership
Tel: +63-2-632-6438
Email: tkoike@adb.org

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