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Harnessing the Nile’s potential through private finance

Arsène Aimé H. Mukubwa's picture

Photo: Jorge Láscar | Flickr Creative Commons

The potential economic benefit from the cooperative use of the Nile’s water is estimated to be worth well over $11 billion—from irrigation and hydropower generation alone. But being able to harness those benefits is a far reach; the Nile Basin—a vital source of drinking water, irrigation, hydropower and transport—has a growing need for infrastructure investments to attain the full potential of this resource. Many of these infrastructure investments need to be coordinated between the basin’s 11 countries to ensure they are creating mutual benefits and are not causing harm to neighboring countries.

The Nile Equatorial Lakes Subsidiary Action Program - Coordination Unit (NELSAP-CU), one of the Nile Basin Initiative’s two investment programs, plays a prominent role in the region’s development. NELSAP supports poverty alleviation, economic growth, and the reversal of environmental degradation in the sub-region through cooperative development and water management. Between 2005 and 2015, we mobilized $90 million of cumulative finance for pre-investment programs (e.g. the Lake Edward and Albert Fisheries Project) and $930 million for investment projects (e.g. the Regional Rusumo Falls Hydroelectric Project).

How PPIAF leveraged $17.1 billion for infrastructure by focusing on the critical upstream

François Bergere's picture

Photo: BrilliantEye | iStock

As the only global facility specifically dedicated to reinforcing the legal, institutional and policy underpinnings of private sector participation in infrastructure—which we call the critical upstream—we at the Public-Private Infrastructure Advisory Facility (PPIAF) realize we have a key responsibility to developing countries.

That responsibility is to help client governments unlock their potential by de-risking investments and creating an enabling environment for private sector participation, itself a condition to achieving the Sustainable Development Goals and climate-smart objectives. As such, PPIAF fits neatly into the new Maximizing Financing for Development (MFD) approach to crowd in the private sector, an initiative launched by the World Bank Group and other multilateral development banks last year.

Water PPPs that work: The case of Armenia

Dambudzo Muzenda's picture

Photo: VahanN / 

Downtown Yerevan. Gusty winds, frosty air. Inside a hotel in the town square, cocktails and canapés, speeches and signatures. On this evening in November 2016, representatives of the State Committee for Water Economy (the Armenian water authority) and Veolia (a large international water operator) gathered to celebrate the signing of a new partnership: a 15-year national lease to provide water and wastewater services for the whole country. The lease began in January 2017, thus marking the start of a “second generation” of water PPPs in Armenia. Solid gains had already been made under the “first generation” between 2000 and 2016. At this crucial juncture, a World Bank study reviewed Armenia’s experience so far and analyzed the way forward under the new national lease.

A timely report on mobilizing Islamic finance for PPPs

Clive Harris's picture
Also available in: Français | العربية

Photo: Artit Wongpradu /

Islamic finance has been growing rapidly across the globe. According to a recent report by the Islamic Financial Services Board, the Islamic finance market currently stands around $1.9 trillion. With this growth, its application has been extended into many areas — trade, real estate, manufacturing, banking, infrastructure, and more.
However, Islamic finance is still a relatively untapped market for public-private partnership (PPP) financing, which makes the recent publication Mobilizing Islamic Finance for Infrastructure Public-Private Partnerships such an important resource, especially for governments and practitioners.  

Boosting access to market-based debt financing for sub-national entities

Kirti Devi's picture

Many countries are experiencing urbanization within the context of increased decentralization and fiscal adjustment. This puts sub-national entities (local governments, utilities and state-owned enterprises) in the position of being increasingly responsible for developing and financing infrastructure and providing services to meet the needs of growing populations.
However, decentralization in many situations is still a work in progress. And often there is a mismatch between the ability of sub-nationals to provide services, and the autonomy or authority necessary to make decisions and access financing—often leaving them dependent on national governments. Additionally, they may also contend with inadequate regulatory and policy frameworks and weak domestic financial and capital markets. 

PPP contract clauses unveiled: the World Bank’s 2017 Guidance on PPP Contractual Provisions

Christina Paul's picture

What are the key considerations for a public authority when drafting a Force Majeure provision in a Public-Private Partnership (PPP) contract? What are the differences between emerging and developed PPP markets in treating Change in Law clauses? And are there particular legal matters that need to be contemplated in a civil law jurisdiction rather than in a common law country when dealing with termination payments under a PPP agreement?

These are only some of the questions the World Bank Group’s recently-published Guidance on PPP Contractual Provisions, 2017 edition aims to address for the benefit of public authorities (contracting authorities) involved in PPPs. This blog is the first in a series of posts that will discuss and explore the issues covered in the 2017 Guidance

Traffic Risk in PPPs, Part III - Allocating Traffic Risk: Prophet & Loss

Matt Bull's picture

Photo: Munish Chandel | Flickr Creative Commons

This is the final blog in a three-part series on traffic risk in PPPs
As explained in the previous two blogs  Traffic Risk in Highway PPPs, Part I: Traffic Forecasting and Traffic Risk in PPPs, Part II: Bias in Traffic Forecasts  traffic risk is inevitable, given our imperfect ability to predict traffic and revenue a long way (often several decades) into the future. And what makes it harder is that there are often biases at play in the typical project environment, which can cause a skewness towards over-estimation rather under-estimation of traffic flows. This, of course, can then result in financial losses and distress for the project, as manifested in a number of high profile bankruptcies, renegotiations and bailouts in the toll road sector.

In the new PPIAF and GIF publication, Toll Road PPPs: Identifying, Mitigating and Managing Traffic Risk, we outline various ways in which governments, bidders and financiers can take important steps to reduce the amount of traffic risk in projects. But we also acknowledge that the use of, for example, industry-standard forecasting techniques, better due diligence and a more stable policy environment will only go so far in reducing traffic risk. The reality is that there will always be some risk in any project, regardless of the best endeavors taken by the project parties. So, the key question is, what should we do with traffic risk and who should be responsible for bearing that risk?

Sub-national pooled financing: Lessons from the United States

Kirti Devi's picture

As infrastructure projects are increasingly decentralized to sub-national governments (SNGs) in many countries, policymakers are keenly interested in developing sub-national bond markets to open up access to private-sector financing. However, the transaction costs of bond issuance are still prohibitive for small SNGs.
Pooled financing—through regional infrastructure funds, municipal funds, or bond banks—is being explored as a solution. Yet, many questions remain: 

How the Mi Baño is helping Peruvians attain the dream of an in-home bathroom

Luciana Guimaraes Drummond E Silva's picture

What is your dream?

Many people living in Peru dream of having a safe, well-built, multi-use bathroom that includes an adjacent area for a shower with a nice shower curtain and mirror and is constructed with bricks and cement, and has a wooden door and window. Sounds ordinary, right?

But for 2.4 million households in Peru this dream is out of reach because they have no access to credit lines, and the only way for them to construct an in-house bathroom would be by paying the entire construction cost upfront. This situation created an unexplored market estimated at $500 million – an amount large enough to attract private sector investors.

Traffic Risk in PPPs, Part II: Bias in traffic forecasts—dealing with the darker side of PPPs

Matt Bull's picture

Photo: Susanne Nilsson| Flickr Creative Commons

This is the second of a three-part series on traffic PPPs.

"It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so."
“The Big Short” 
Forecasting traffic accurately is a very difficult and thankless task, as I explained in my previous blog: Traffic Risk in Highway PPPs, Part I: Traffic Forecasting. As such, this gives rise to very real financial risks if these forecasts turn out to be wrong. This risk has crystallized many times as manifested in high-profile distressed projects, bankruptcies, renegotiations and bailouts.

So what’s driving the inaccuracy and resulting risk in traffic forecasts? In the Public-Private Infrastructure Advisory Facility (PPIAF) and Global Infrastructure Facility (GIF) publication, Toll Road PPPs: Identifying, Mitigating and Managing Traffic Riskwe postulate that forecasting inaccuracy comes from three sources: