Bangladesh had the third highest level of Private Participation in Infrastructure (PPI) investments at $2.7 billion from 2011 to 2015, says a new World Bank report During the period, the number of PPI projects in Bangladesh was 24, accounting for 17% of total IDA projects, according to a report titled “PPI in IDA countries, 2011-2015” released by the World Bank recently. It said the Munshiganj Mawa Orion-Long King coal-fired plant, a greenfield (Build-Own-Operate) project is the largest deal at $579 million. This project reached financial closure in 2012 and it aims to generate 522MW of energy to help address the country’s power shortage problem. The report analyses trends in investment commitments in infrastructure projects with private sector participation in 56 countries eligible for support from the International Development Association, a lending arm of the World Bank for the poorest countries during the period. The analysis includes only projects in energy, transport, water and sanitation sectors. As currently defined by the World Bank, IDA countries are those that have Gross Net Income (GNI) per capita below the threshold of $1,215. During 2011–2015, PPI investments in IDA countries amounted to $27 billion across 143 projects concentrated in 24 out of the 56 IDA countries. The nation with the most activity among IDA countries is the Lao People’s Democratic Republic (PDA). It has 16 hydropower projects, and these amount to almost one-third of total PPI investments among IDA countries during the period. In 2015, PPI investments (and the number of projects) reached its lowest level in IDA countries since 2011. This was because Lao PDR and Ghana, which together captured 46% of total PPI investments in the year 2014, had no investments in 2015. The energy sector has been the main driver of PPI investments in IDA countries every single year, with the transport sector claiming a lesser role in the market. Among IDA economies, Bangladesh, Honduras and Kenya have undertaken reforms of their regulatory and legal environment and have a significant role in IDA PPI investments over the five-year period. A robust institutional and regulatory framework is critical in attracting private investment for infrastructure projects. Empirical evidence suggests that a favourable regulatory and institutional framework corresponds with a successful PPP investment environment, despite limited data on the subject. Bangladesh has witnessed notable progress in its legal and institutional framework, with the introduction of its recent PPP Act, 2015. The new law builds on the PPP Policy 2010 to further streamline the formulation and execution of PPP projects. The country also created the PPP Office (PPPO) under the Prime Minister’s office and the Cabinet Committee on Economic Affairs (CCEA), which are tasked with advice, oversight, final project approval and appraisal of contingent liabilities. The Public Procurement Act of 2006 and the Public Procurement Rules of 2008 call for fair competition and a transparent bidding process. The market for PPIs has not been expanding. Only 24 out of the 56 IDA countries had at least one project during the period 2011 to 2015. Moreover, no more than 16 countries brought projects to the market in a single year. In 2015, only seven countries brought projects to the market. Bangladesh was the sole country to have a continued presence in the market during this five-year period.
