The public sector alone, even with financing from multilateral development banks, cannot meet the growing demand for infrastructure investment in Asia and the Pacific. Public-private partnerships (PPPs) are a way of mobilizing not just financial but also managerial and technical resources of the private sector to provide efficient and modernized public services.
ADB's Public-Private Partnership Operational Plan 2012-2020 provides some fast facts on PPPs and its key role in the region.
$8 trillion: Asia's infrastructure investment needs from 2010 to 2020 - about $750 billion annually.
More than three-fifths: 68% of the estimated infrastructure investment until 2020 is for new capacity. The remaining 32% is for maintaining and replacing existing infrastructure.
$12.25 billion: ADB's sovereign ($10.65 billion) and nonsovereign ($1.6 billion) lending portfolio for infrastructure in 2011.
3 options: To address the massive infrastructure requirements, countries have three principal options: (i) explore additional funding from traditional sources, (ii) look into off-budget sources, and (iii) consider a greater role for PPPs in procuring infrastructure.
3 types: There are three major types of PPP contracts, from high to low risk on the part of the private sector: (i) concession contract, (ii) lease contract, (iii) performance-based contracts (management and service contracts).
4 benefits: When efficiently and transparently procured, the benefits of involving the private sector in the delivery of infrastructure include (i) efficient use of the resources, (ii) improved asset and service quality, (iii) improved public sector management, and (iv) overall improvement in public sector procurement.
4 pillars: ADB bases its PPP operations on four pillars: (i) advocacy and capacity development, (ii) enabling environment, (iii) project development, and (iv) project financing.
$2.305 billion: In 2011, the Private Sector Operations Department (PSOD) provided $2.305 billion (including loans, equity, complementary loan, partial credit guarantee and political risk guarantee) to 17 projects.