40517-013: Public-Private Infrastructure Development Facility (PPIDF) | Asian Development Bank

Bangladesh: Public-Private Infrastructure Development Facility (PPIDF)

Sovereign (Public) Project | 40517-013 Status: Active

The Public-Private Infrastructure Development Facility (PPIDF) includes and $82 million loan from ADB's ordinary capital resources (OCR), an $83 million equivalent loan from ADB's special funds resources and a technical assistance grant of $500,000 for capacity building and supporting project implementation.

Component A will use ADB's OCR funds of $82 million to provide financing to the Government of Bangladesh for relending to the Infrastructure Development Company Limited (IDCOL) to finance private sector-sponsored large infrastructure subprojects with a subproject size of more than $30 million.

Component B will provide ADF support of $50 million equivalent to the Government for relending in local currency to IDCOL to finance small and medium-sized infrastructure subprojects primarily located in rural and semiurban areas, especially in the energy sector.

Project Details

Project Officer
Saha, Bidyut Kumar South Asia Department Request for information
Country
  • Bangladesh
Modality
  • Loan
Sector
  • Finance
 
Project Name Public-Private Infrastructure Development Facility (PPIDF)
Project Number 40517-013
Country Bangladesh
Project Status Active
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2453-BAN: Public-Private Infrastructure Development Facility (PPIDF)
concessional ordinary capital resources lending / Asian Development Fund US$ 83.00 million
Loan 2454-BAN: Public-Private Infrastructure Development Facility (PPIDF)
Ordinary capital resources US$ 82.00 million
Loan: Public-Private Infrastructure Development Facility (PPIDF)
Islamic Development Bank US$ 100.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector

Finance / Infrastructure finance and investment funds

Gender Equity and Mainstreaming No gender elements
Description

The Public-Private Infrastructure Development Facility (PPIDF) includes and $82 million loan from ADB's ordinary capital resources (OCR), an $83 million equivalent loan from ADB's special funds resources and a technical assistance grant of $500,000 for capacity building and supporting project implementation.

Component A will use ADB's OCR funds of $82 million to provide financing to the Government of Bangladesh for relending to the Infrastructure Development Company Limited (IDCOL) to finance private sector-sponsored large infrastructure subprojects with a subproject size of more than $30 million.

Component B will provide ADF support of $50 million equivalent to the Government for relending in local currency to IDCOL to finance small and medium-sized infrastructure subprojects primarily located in rural and semiurban areas, especially in the energy sector.

Component C will provide ADB funding of $33 million equivalent for the purpose of promoting renewable energy systems in Bangladesh. IDCOL will finance the set-up of renewable energy systems such as solar home systems and/or biomass installations through a microfinance-based, direct sales program.

Project Rationale and Linkage to Country/Regional Strategy The PPIDF will directly support the Government's infrastructure development agenda by providing long-term funds for infrastructure financing. With ADB's assistance through the facility, IDCOL will be able to provide funds at commercial terms with maturity of more than 20 years for infrastructure subprojects, which are otherwise currently not available in the market.
Impact Improved per capita infrastructure availability
Project Outcome
Description of Outcome Enhanced private sector participation in infrastructure development
Progress Toward Outcome Imprest Advance of $30 million made to IDCOL for disbursement to Regent Power. The liquidation is expected by December 2017.
Implementation Progress
Description of Project Outputs

1. Improved lending terms of IDCOL for infrastructure subprojects

2. Improved ability of IDCOL to mobilize long-term capital

3. Enhanced governance at IDCOL

4. Enhanced capacity for application of environmental and social safeguards standards

5. Enhanced efficiency of IDCOL in developing and financing infrastructure subprojects

Status of Implementation Progress (Outputs, Activities, and Issues)

As per current lending policy of IDCOL, maximum tenor is 15 years including a maximum grace period of 3 years.

IDCOL managed to reduce its weighted average borrowing cost from 3.29% in FY2011 to 2.93% in FY2015 (a reduction of 10.9%). The indicator appears to be inappropriate. Interest rate efficiency should be compared with a benchmark market rate (such as, LIBOR) rather than on absolute basis.

IDCOL is yet to issue debt instruments as the company has adequate credit lines from development partners and underdeveloped capital market.

IDCOL has arranged syndicated term loan facilities for eight infrastructure subprojects, of which one was financed by ADB. Of the eight, four are in the power sector, two are towards central effluent treatment plants, and the remaining two are for ICT infrastructure and land port.

IDCOL has obtained AAA rating in 2015. The rating is sustained in 2016.

IDCOL will consider obtaining credit rating from an internationally accepted agency once it intends to raise additional fund from international market. At present, there is no plan for foreign currency loan on commercial terms.

IDCOL has obtained environmental and social clearances from ADB for five projects i.e. NTTN, WiMAX, and 108 MW power plant of ECPVCL, Regent Porwer Plant, and Summit Meghnaghat Power Plant.

IDCOL complied under ESSF for all its subprojects under PPIDF.

ESSF has been updated and posted on IDCOL's website since 2012.

The processing time, among other things, depends on the complexity of projects and scope of due diligence required. For the three large subprojects financed under the OCR loan of PPIDF, the average processing time (i.e. from the date IDCOL received the proposal until the time of IDCOL's Board approval) was approximately 12 months, on average. However, the processing time for smaller projects or projects funded from IDCOL's own resources are often shorter than 4 months. Larger projects having multiple foreign lenders and/or projects requiring multiple approvals from various regulators and from ADB require longer processing time. This indicator, alone, is not a good measure of efficiency, as complex infrastructure subjects may require 12 months or more.

Geographical Location Nation-wide
Safeguard Categories
Environment FI
Involuntary Resettlement A
Indigenous Peoples A
Summary of Environmental and Social Aspects
Environmental Aspects The Project is classified as category FI (Financial Intermediaries) in accordance with ADB's Environment Policy (2002). An environmental and social safeguards framework was developed to assist in the environmental and social safeguards assessment of subprojects during implementaion of the Project and to ensure compliance with all relevant ADB policies.
Involuntary Resettlement Involuntary resettlement has significant impact. A resettlement framework has been developed as part of the environmental and social safeguards framework to guide the resettlement assessment of subprojects during the implementation of PPIDF. Based on the framework, appropriate resettlement plans were prepared for each subproject having resettlement impacts.
Indigenous Peoples Impact on indigenous peoples is also significant. A social safeguard framework covers the basic requirement of screening and planning to address any tribal (indigenous) population issues arising from any subproject. Appropriate tribal peoples development plans were prepared for each subproject having any impacts.
Stakeholder Communication, Participation, and Consultation
During Project Design Extensive consultation meetings were held with the Finance Division of the Ministry of Finance (the executing agency), IDCOL (the implementing agency), Bangladesh Bank, Ministry of Finance, and the private sector. Furthermore, on-site due diligence was conducted with sponsors of large infrastructure subprojects and participating organizations under IDCOL's renewable energy program.
During Project Implementation Periodical meetings, review missions, follow-up are being carried out during project implementation. All activities under the loans have been completed.
Business Opportunities
Consulting Services n/a
Procurement

For subprojects to be financed out of component A, IDCOL will required its sub-borrowers to adopt internationally competitive bidding procedures in accordance with ADB's Procurement Guidelines as amended from time to time, and the Government's guidelines, policies, and regulations.

For subprojects to be financed out of components B and C, ADB will encourage IDCOL to require its sub-borrowers to adopt international competitive bidding procedures in accordance with ADB Procurement Guidelines as amended from time to time when the amount of the investment is unusually large and economy and efficiency can be gained by such procedures.

For procurement of goods and services to be financed by subloans out of the loan proceeds, the sub-borrower will ensure, and certify to ADB if requested, that goods and services obtained are suitable for the subloans, that the price paid is least-cost, and that account is taken of factors such as time of delivery, efficiency, and the reliability of goods.

For build-operate-transfer subprojects and variants, if the subproject sponsor or engineering, procurement, and construction contractor is selected through competitive bidding amount international entities in accordance with procedures acceptable to ADB, such subproject sponsore or contractor may apply its own procedures for procurement provided that such procurement is for goods, services, and works supplied from, or produced in, ADB member countries. Moreover, such subproject sponsors or contractors must only be nationals of ADB member countries.

Responsible ADB Officer Saha, Bidyut Kumar
Responsible ADB Department South Asia Department
Responsible ADB Division Bangladesh Resident Mission
Executing Agencies
Finance Division, MOF (EA)
Bangladesh Secretariat, Dhaka-1000
Bangladesh
Ministry of Finance
Md. Aminul Islam Bhuiyan
Sher-e Bangla Nagar, Dhaka, Bangladesh
Timetable
Concept Clearance 02 May 2007
Fact Finding 22 Oct 2007 to 26 Oct 2007
MRM 22 May 2008
Approval 02 Oct 2008
Last Review Mission -
PDS Creation Date 08 Jun 2007
Last PDS Update 26 Sep 2017

Loan 2453-BAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
02 Oct 2008 21 Oct 2008 24 Feb 2009 31 Dec 2013 - 21 Jul 2014
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 183.00 Cumulative Contract Awards
ADB 83.00 02 Oct 2008 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 100.00 02 Oct 2008 81.64 0.00 100%

Loan 2454-BAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
02 Oct 2008 21 Oct 2008 24 Feb 2009 31 Dec 2013 31 Dec 2014 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 82.00 Cumulative Contract Awards
ADB 82.00 02 Oct 2008 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 02 Oct 2008 82.00 0.00 100%

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Title Document Type Document Date
Public-Private Infrastructure Development Facility - Summit Meghnaghat Power Company Limited: Annual Environmental and Social Compliance Audit Report Environment and Social Compliance Audit Reports Mar 2016
Public-Private Infrastructure Development Facility - Energypac Confidence Power Ventures Chittagong Limited: Annual Environmental and Social Compliance Audit Report Environment and Social Compliance Audit Reports Mar 2016
Public-Private Infrastructure Development Facility - Regent Energy and Power Limited: Annual Environmental and Social Compliance Audit Report Environment and Social Compliance Audit Reports Mar 2016
Public-Private Infrastructure Development Facility - Energypac Confidence Power Ventures Chittagong Limited: Annual Environmental and Social Compliance Audit Report Environment and Social Compliance Audit Reports May 2015
Public-Private Infrastructure Development Facility (PPIDF): 108 MW Power Project at Palash, Narsingdhi - Annual Environmental and Social Compliance Audit Report (Regent Energy and Power Limited) Environment and Social Compliance Audit Reports Apr 2015
Public-Private Infrastructure Development Facility (PPIDF): Meghnaghat 335 MW Project, Narayanganj - Annual Environmental and Social Compliance Audit Report (Summit Meghnaghat Power Company Limited) Environment and Social Compliance Audit Reports Apr 2015
Public-Private Infrastructure Development Facility (PPIDF): 108 MW Power Project at Kolagaon, Chittagong - Annual Environmental and Social Compliance Audit Report (ECPV Chittagong Limited) Environment and Social Compliance Audit Reports Apr 2015
Public-Private Infrastructure Development Facility: 108 MW Power Project at Palash, Narsingdhi Social Monitoring Report (February 2014) Social Monitoring Reports Feb 2014
Public-Private Infrastructure Development Facility (PPIDF): Environment and Social Due Diligence Report Safeguards Due Diligence Reports Oct 2013
Public-Private Infrastructure Development Facility Indigenous Peoples Planning Frameworks/Indigenous Peoples Development Frameworks May 2008

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

No tenders for this project were found.

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.