Helping to eliminate poverty and achieve sustainable development by facilitating private involvement in infrastructure
QUARTERLY REPORT:
Status of Approved Activities
(July 1 – September 30, 2004)
PPIAF: c/o World Bank, 1818 H Street NW, WashingtonDC 20433 USA
Tel: +1(202)458 5588 Email: Fax: +1(202)522 7466
Helping to eliminate poverty and achieve sustainable development by facilitating private involvement in infrastructure
November 2, 2004
Program Council Members:
In accordance with the PPIAF Program Charter, please find attached the PPIAF quarterly progress report on the status of approved activities. This report covers the period from July 1 – September 30, 2004.
Sincerely,
Jyoti Shukla
Program Manager
PPIAF: c/o World Bank, 1818 H Street NW, WashingtonDC 20433 USA
Tel: +1(202)458 5588 Email: Fax: +1(202)522 7466
PPIAF Quarterly Report:
Status of Approved Activities
(July 1- September 30, 2004)
- New in PPIAF
Program Council News
As most of you are aware, Ms. Nemat Shafik recently left the World Bank to accept a senior management position at DFID. Kathy Sierra is now the new Vice President for Infrastructure at the World Bank and also the ex-officio Chair of the PPIAF’s Program Council.
Meanwhile, various donors have been completing documentation to transfer funds for FY 2004 and 2005, including Germany, Norway, the Netherlands, Sweden, France, Japan and USAID. We have also received word that the European Community has approved its allocation to PPIAF and we are looking forward to completing the formalities and finally welcoming the EC as a new member to PPIAF.
With regard to the next Program Council meeting, the Asian Development Bank has proposed the meeting dates to be on May 24 and 25, 2005 in Manila and these dates are now confirmed.
The Technical Advisory Panel
During this quarter, the Program Council also accepted the recommendation of the Chair of the Technical Advisory Panel to initiate a policy of rotation of TAP members. The Program Council has also decided to reduce the membership of the TAP from seven members to five and agreed that for this year and the next, two TAP members will retire and will be replaced by one new member, bringing the overall membership to five by next year. The first two to retire were the Chair, Mr. Kamal Hossain and Mr. Jannik Lindbaek. The Program Council named Mr. Tony Gomez Ibanez the new Chair of the TAP. The next meeting of the Technical Advisory Panel is scheduled for November 12, 2004.
The Program Council has nominated Mr. Nasser Munjee from India to be the new member of the TAP. Mr. Munjee is a very experienced and well-known practitioner of private infrastructure finance in India, and until recently, the Managing Director and CEO of the Infrastructure Development Finance Company (IDFC), which he helped establish in 1997. The IDFC is an entity established to promote long-term infrastructure finance in India. Though promoted by the government, the IDFC has significant institutional and private sector investors. Prior to that, Mr. Munjee was Executive Director of the Housing Development Finance Corporation (HDFC) of India. By training, Mr. Munjee is an economist and has studied at the London School of Economics and the University of Chicago.
Program Management Unit Staff
The Program Management Unit has now made two new appointments. James Leigland has been appointed our Regional Program Leader for Africa based in Nairobi, and Bhavna Bhatia is the new Regional Program Leader for South Asia based in New Delhi. Jim and Bhavna will take on their new responsibilities starting November 15, 2004.
II. New Data for Private Infrastructure Investment in 2003
The PPI database which PPIAF co-funded in its early days tracks PPI projects that reached financial closure in client countries and the investments associated with these projects. Data for the years shows that in 2003, 107 projects reached financial closure in 47 countries, representing investment commitments of US$ 50 billion – back to 1994 levels. Electricity was the only sub-sector and East Asia and the Middle East and North Africa the only developing regions that saw private activity grow in 2003. Since its peak in 1997 at US$ 131 billion, private investment flows to infrastructure projects have gradually declined (except for a temporary recovery in year 2000). The number of PPI transactions in developing economies have been reduced to less than a third of its peak in 1997 in 2003 compared to 353 in 1997) reflecting the growing challenges in sectors with mass retail consumers (i.e., water, urban transport, electricity distribution) and the slow down of government assets divestiture.
III. Notable PPIAF Products, Impact and Dissemination Activities During the Quarter
In addition to the results of the PPI database in 2003, following are some notable developments and emerging impacts from PPIAF funded activities.
One notable development this quarter was the recent formation of the National Telecommunications Council in Thailand after almost three years of technical assistance. The Government of Thailand adopted new policies to transform the telecommunications sector in 2000. At the heart of this reform program was new legislation establishing the National Telecommunications Commission (NTC). A PPIAF grant ("Capacity Building for the Thai National Telecommunications Commission") began assisting the Government of Thailand with the main preparation work necessary to establish the NTC, including preparing detailed, world-class licenses for all main, fixed, and mobile telecommunications service providers in Thailand.
In Africa, the first "Foundations Course in Utility Regulation in Africa" was held in Cape Town on August 22-27, 2004. The course was organized under the aegis of the African Forum for Utility Regulation (AFUR), in coordination with the Regional Electricity Regulators Association (RERA), the World Bank Group, the National Association of Regulatory Utility Commissioners (NARUC), the University of Florida Public Utility Research Center, and the Graduate School of Business at the University of Cape Town, which also hosted the event. Financial support was provided by the United States Agency for International Development (USAID) and the World Bank/Public-Private Infrastructure Advisory Facility (PPIAF). The course was attended by 42 regulatory and industry professionals from 13 countries, from the energy, water and telecommunications sectors. International and regional experts and practitioners introduced fundamental techniques in utility regulation, including pricing and tariff design, quality of service regulation, pro-poor approaches, and the administration of regulatory process. Attendees also participated in moderated break-out sessions and practical exercises on sector-specific issues.
In August, the global activity on the viability of establishing a searchable, web-based multi-lingual database of regulatory decisions in the telecommunications sector got to a propitious start. The inception report was presented at the International Telecommunications Union regional meeting of regulators held in Geneva. The main topic of discussion was dispute resolution in the sector.
At the end of September, PPIAF co-sponsored the second international conference on financing municipalities and sub national governments where the role of specialized local funds and financial intermediaries were discussed. The conference was co sponsored with the Inter American Development Bank, the USAID, the International Private Water Association and the World Bank. The conference brought together investors, local government officials such as mayors and treasurers and representatives from public and private sector financial institutions involved in local government finance to discuss ways to improve financing of infrastructure in cities and towns. A feature forum focused on new pooled financing approaches being developed in Asia and Latin America as well as emerging regional public-private partnerships efforts from Latin America, Eastern Europe, the Middle East and North Africa and Asian institutions specializing in the role of the private sector in local government infrastructure finance.
- Call for Proposals and New Activities Approved
The first quarter FY 2005 call for proposal succeeded in attracting 40 proposals with a face value of $17.4 M. 18 activities totaling $3.9 million of PPIAF grants were approved. 8 of these were small activities ($75,000 or less), with an average value of $67,500. The remaining 10 were medium and large activities, with an average size of $340,230.
A. The geographic focus of the 18 activities approved are summarized in Table 2. The largest share of the activities was in the global portfolio, due largely to a large multi-country activity on the development of credit ratings.
Table 1: Geographic Focus of Total Approved Activities (July 1– September 30, 2004)Region (# of activities; amount) / % By number / % By value
Sub-Saharan Africa (4;858,035) / 22 / 22
East Asia and Pacific (3; 507,950) / 17 / 13
Europe and Central Asia (3; 300,300) / 17 / 8
Global (4; $1,352,500) / 22 / 34
Latin America and Caribbean (2; $774,020) / 11 / 20
Middle East and North Africa (0; $0 ) / 0 / 0
South Asia (2; $149,500) / 11 / 3
B. The sectoral focus of the 18 activities approved are summarized in Table 3. As is typical of the PPIAF portfolio, multi-sectoral activities dominated, with the energy sector being the second largest sector by approval of activities.
Table 2: Sectoral Focus of Total Approved Activities (July 1 – September 30, 2004)Sector (# of activities; amount) / % By number / % By value
Multi-sector (6; $1,454,220) / 33 / 37
Water and sanitation (3; $794,535) / 17 / 20
Energy (6; $1,068,550 ) / 33 / 27
Transport (2; $350,000) / 11 / 9
Telecommunications (1; $275,000) / 6 / 7
C. The source of funding for the 18 approvedactivities is summarized in Table 1. All the activities approved in this quarter were financed from the core funds.
Table 3: Funding Source for PPIAF Activities (April 1– June 30, 2004)Source / No. Of Activities / Value
Core Fund / 18 / 3,942,305
Non-Core Fund / 0 / 0
Total / 18 / 3,942,305
D. Nature of Activities The indicative work program for PPIAF for 2003-2004 includes guidance as to the breakdown of activities by nature of activity, distinguishing between global best practice work and five specific categories of country-specific activity (i.e., infrastructure development strategies; specific policy, regulatory and institutional reforms; consensus building; support to pioneering transactions; and capacity building).
In practice, many approved activities comprise actions that correspond to two or more of these specific categories. The following analysis is based on the PMU’s judgment as to the primary focus of each approved activity, and should thus be treated as indicative only.
The primary focus of the 18 activities approved are summarized in Table 4.
Table 4: Primary Actions of Total Approved Activities (July 1– September 30, 2004)Action Area (# of activities; total amount) / % By number / % By value
Infrastructure development strategies (8; $2,154,805) / 44 / 54
Policy, regulatory and institutional reforms (3; $825,000) / 17 / 21
Consensus building (1; $75,000) / 6 / 2
Capacity building (0; $0) / 0 / 0
Emerging best practice (5; $670,000) / 27 / 17
Pioneering Transactions (1; $217,500) / 6 / 6
V.Next Call For Proposal for Fiscal 2005
The next call for proposals for FY 2005 third quarter was issued in October and will be re-issued again in November and December 2004 closing on December 30, 2004.
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