Bangladesh: Third Public-Private Infrastructure Development Facility
The Third Public-Private Infrastructure Development Facility (PPIDF 3) is a continuation of the work carried out under the Public-Private Infrastructure Development Facility (PPIDF 1) and the Second Public-Private Infrastructure Development Facility (PPIDF 2) in addressing the infrastructure deficiencies in Bangladesh. Through the two earlier interventions, ADB has provided long-term debt financing and catalyzed private sector participation through the implementing agency, i.e. Infrastructure Development Company Limited (IDCOL) which substantially contributed to economic growth in the country. The design of the project serves to catalyze commercial financing for public-private partnership (PPP) projects, thereby reducing the pressure of direct financing on the public budget.
Al Hasan, Mohammad Rashed
South Asia Department
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- Technical Assistance
|Project Name||Third Public-Private Infrastructure Development Facility|
|Country / Economy||Bangladesh
|Project Type / Modality of Assistance||Loan
|Source of Funding / Amount||
|Strategic Agendas||Environmentally sustainable growth
Inclusive economic growth
|Drivers of Change||Gender Equity and Mainstreaming
Private sector development
|Sector / Subsector||
Finance / Infrastructure finance and investment funds
|Gender Equity and Mainstreaming||Some gender elements|
|Description||The Third Public-Private Infrastructure Development Facility (PPIDF 3) is a continuation of the work carried out under the Public-Private Infrastructure Development Facility (PPIDF 1) and the Second Public-Private Infrastructure Development Facility (PPIDF 2) in addressing the infrastructure deficiencies in Bangladesh. Through the two earlier interventions, ADB has provided long-term debt financing and catalyzed private sector participation through the implementing agency, i.e. Infrastructure Development Company Limited (IDCOL) which substantially contributed to economic growth in the country. The design of the project serves to catalyze commercial financing for public-private partnership (PPP) projects, thereby reducing the pressure of direct financing on the public budget. An additional objective of the facility is to help provide the rural population and small to medium enterprises with clean and affordable electricity either through grid-connected or off-grid energy efficiency and renewable energy solutions. Solar home systems (SHSs) will not be financed under PPIDF 3 given the market saturation and availability of funding from partner donors.|
|Project Rationale and Linkage to Country/Regional Strategy||A key design element of the proposed Third Public-Private Infrastructure Development Facility (PPIDF 3) is the introduction of the multitranche financing facility (MFF) financial intermediary (FI) lending modality. The MFF-FI modality is particularly well suited for FI interventions which provide long-term funding to public-private partnership (PPP) infrastructure projects. These PPP interventions are typically developed in a phased manner based on project implementation requirements. The MFF modality allows the borrower, Infrastructure Development Company Limited (IDCOL), to onlend financing for subprojects based on readiness criteria including finalization of risk-sharing arrangements, readiness of engineering procurement and construction, and phased release of equity. The disbursement to a subproject can take place through multiple tranches with time-slicing given the typical characteristic of staggering of payments, and thereby providing IDCOL the flexibility to plan cost-effective disbursements of subprojects.|
|Impact||Investments in infrastructure increased (Bangladesh Seventh Five Year Plan, FY2016-FY2020)|
|Description of Outcome||Private sector investments in infrastructure, including renewable energy leveraged|
|Progress Toward Outcome||a) As of September 2021, under PPIDF3 Tranche 1 - a total of $231 million committed and $216 million disbursed under 7 subprojects. Total private sector investments on eligible infrastructure subprojects catalyzed under PPIDF3 is $561.7 million. b) For RE and EE subprojects, $3.6 million of private sector debt investments and $5.4 million private sector equity investments were catalyzed under PPIDF3 Tranche 1.|
|Description of Project Outputs||
Available long-term debt financing for infrastructure projects increased
Take-out financing for infrastructure projects catalyzed
IDCOLs institutional capacity strengthened
|Status of Implementation Progress (Outputs, Activities, and Issues)||
Ongoing implementation. As of 30 September 2021, $226.16 million loan has been extended by utilizing the $260 million PPIDF3 Tranche 1 loan to finance a total of 9 eligible subprojects, that includes 1 medium-scale RE subproject.
1 (one) infrastructure subproject has been refinanced under PPDIF3 Tranche 1.IDCOL has significantly strengthened its risk management policy and manpower over the recent years and recruited a Chief Risk Officer to supervise IDCOLs overall risk management framework. IDCOL has adopted the Integrated Risk Management Guidelines for Financial Institutions (January 2016) of Bangladesh Bank. Additionally, Operational Risk Management framework is under preparation by an independent consultant and is expected to be completed by December 2021.
Treasury management framework under preparation by an independent consultant and expected to be completed by December 2021.
Required procurement is under process and this is expected to be completed by December 2021.
Safeguards capacity building plan for improving social and environmental risk mitigation and gender equality results is being prepared in-house by IDCOLs E&S officials and will be certified by an independent consultant by December 2021.
IDCOL's mid-term business and strategy plan is being developed by an independent consultant and expected to be finalized by December 2021.
|Summary of Environmental and Social Aspects|
|Environmental Aspects||FI Category. ADB is reviewing every subproject and will determine the environment categorization accordingly. If triggering category A, the proposed subproject will not be qualified for ADB financing.|
|Involuntary Resettlement||FI Category. ADB is reviewing every subproject and will determine the IR categorization accordingly. If triggering category A, the proposed subproject will not be qualified for ADB financing.|
|Indigenous Peoples||FI Category. ADB is reviewing every subproject and will determine the IP categorization accordingly. If triggering category A, the proposed subproject will not be qualified for ADB financing.|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design|
|During Project Implementation||ADB reviews and monitors that every subproject ensures stakeholder communication, participation, and consultation.|
|Consulting Services||Not applicable|
|Procurement||The proposed Third Public- Private Infrastructure Development Facility (PPIDF 3) consists of a $526 million multitranche financing facility (MFF) which will be funded by a regular ordinary capital resources (OCR) loan of $500 million and a concessional OCR loan of $26 million. The funds under the MFF will be made available to Infrastructure Development Company Limited (IDCOL), a fully government-owned infrastructure finance company through the financial intermediary lending modality. IDCOL will use the ADB loan proceeds to provide subloans to sponsors to fund subprojects in the traditional infrastructure sectors such as energy, transport, urban, health, and education. The concessional ordinary capital resources loan will be exclusively used to finance renewable energy subprojects. There will be no direct funding for procurement of goods and services under this facility which could potentially lead to longer and complex implementation considerations.|
|Responsible ADB Officer||Al Hasan, Mohammad Rashed|
|Responsible ADB Department||South Asia Department|
|Responsible ADB Division||Public Management, Financial Sector and Trade Division, SARD|
|Concept Clearance||01 Jul 2016|
|Fact Finding||22 Aug 2016 to 24 Aug 2016|
|MRM||26 Sep 2016|
|Approval||18 Jul 2017|
|Last Review Mission||-|
|Last PDS Update||07 Dec 2021|
MFF Facility Concept 0100-BAN
|Financing Plan||Loan Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||526.26||Cumulative Contract Awards|
|Approval||Signing Date||Effectivity Date||Closing|
|18 Jul 2017||12 Jul 2018||12 Jul 2018||31 Mar 2020||31 Dec 2021||-|
|Financing Plan/TA Utilization||Cumulative Disbursements|
|750,000.00||0.00||0.00||0.00||0.00||0.00||750,000.00||01 Feb 2022||342,609.93|
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 Access to Information Policy (AIP) 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.
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|Title||Document Type||Document Date|
|Loan Agreement (Ordinary Operations [Concessional]) for Loan 3555-BAN: Third Public-Private Infrastructure Development Facility - Tranche 1||Loan Agreement (Ordinary Resources)||Nov 2017|
|Project Agreement for Third Public-Private Infrastructure Development Facility - Tranche 1||Project/Program Agreements||Nov 2017|
|Loan Agreement for Loan 3554-BAN: Third Public-Private Infrastructure Development Facility - Tranche 1||Loan Agreement (Ordinary Resources)||Nov 2017|
|Third Public-Private Infrastructure Development Facility: Report and Recommendation of the President||Reports and Recommendations of the President||Jul 2017|
|Third Public-Private Infrastructure Development Facility: Facility Administration Manual (As of Board Approval)||Facility Administration Manual||Jul 2017|
|Third Public-Private Infrastructure Development Facility: Initial Poverty and Social Analysis||Initial Poverty and Social Analysis||Jul 2016|
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|
|Third Public-Private Infrastructure Development Facility: Environmental and Social Safeguards Framework of Infrastructure Development Company Limited||Environment and Social Safeguards Frameworks||Aug 2011|
Evaluation Documents See also: Independent Evaluation
None currently available.
None currently available.
The Access to Information Policy (AIP) 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.
ADB $526 Million Assistance to Further Boost Public-Private Infrastructure in BangladeshADB has approved a $526 million multitranche financing facility to help sustain and increase infrastructure investments in Bangladesh, particularly in financing PPP projects as well as renewable energy interventions.
|Tender Title||Type||Status||Posting Date||Deadline|
|Consulting service for Development of IDCOL’s ICT Security Policy, Guideline and Procedure to comply with Bangladesh Bank’s recent ICT Security Guideline and Achieve ISO-27001:2018 Certification||Individual - Consulting||Closed||07 May 2021||21 May 2021|
|Consulting service for Assessment, Review and Recommendation on IDCOL’s ICT infrastructure, networking, security arrangement and Management Information System||Individual - Consulting||Closed||07 May 2021||21 May 2021|
|Capacity Development for Infrastructure Development Company Limited||Firm - Consulting||Closed||18 Jul 2018||16 Aug 2018|
|Contract Title||Approval Number||Contract Date||Contractor | Address||Executing Agency||Total Contract Amount (US$)||Contract Amount Financed by ADB (US$)|
|Capacity Development||Technical Assistance 9344||26 Aug 2019||PRICEWATERHOUSECOOPERS PVT. LTD. (IND) (INDIA) in association with PricewaterhouseCoopers Bangladesh Private Limited (BANGLADESH) | 8-2-624/A/1, 4th Floor Hyderabad, Andhra Pradesh 500 034 India||Ministry of Finance||511,820.00||—|
None currently available.