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Bangladesh: Third Public-Private Infrastructure Development Facility

Sovereign (Public) Project | 42180-016 Status: Active

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.

Project Details

Project Officer
Zhang, Dongdong South Asia Department Request for information
Country
  • Bangladesh
Modality
  • Loan
  • Technical Assistance
Sector
  • Finance
 
Project Name Third Public-Private Infrastructure Development Facility
Project Number 42180-016
Country Bangladesh
Project Status Active
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
MFF Facility Concept 0100-BAN: Third Public-Private Infrastructure Development Facility
Ordinary capital resources US$ 500.00 million
concessional ordinary capital resources lending / Asian Development Fund US$ 26.00 million
TA 9344-BAN: Capacity Development in Infrastructure Development Company Limited
Financial Sector Development Partnership Special Fund US$ 750,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Partnerships
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)
Project Outcome
Description of Outcome Private sector investments in infrastructure, including renewable energy leveraged
Progress Toward Outcome
Implementation Progress
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)
Geographical Location Bangladesh
Summary of Environmental and Social Aspects
Environmental Aspects

PPIDF 3 is classified category FI for environment, involuntary resettlement, and indigenous peoples. No subproject that is classified category A in any of these three safeguard areas will be considered for financing under the investment program. All subloan agreements will incorporate specific covenants to ensure compliance with ADB's Safeguard Policy Statement (2009).

Infrastructure Development Company Limited (IDCOL) has an environmental and social safeguards framework (ESSF) developed in 2011 with ADB technical support under Public-Private Infrastructure Development Facility (PPIDF). A review in August 2016 to ensure that the ESSF remained consistent with ADB's Safeguard Policy Statement identified areas for strengthening. The associated technical assistance (TA) will therefore help IDCOL enhance ESSF by (i) incorporating changes in the central bank's June 2015 draft guidelines on environmental and social risk management for banks and financial institutions, (ii) streamlining the procedures for assessing and reviewing subprojects, and (iii) making the changes necessary to accommodate the introduction of take-out financing by IDCOL under the Third Public-Private Infrastructure Development Facility (PPIDF 3). IDCOL has an environmental and social policy approved by its board and an environmental and social safeguards management unit with two senior safeguards staff members. Depending on the complexity of subprojects, IDCOL may hire an additional senior staff member to deal with social and gender issues. IDCOL will submit annual reports to ADB on the status of ESSF implementation.

Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
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 Zhang, Dongdong
Responsible ADB Department South Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SARD
Executing Agencies
Ministry of Finance
Economic Relations Division (ERD), MOF
Sher-e-Bangla Nagar, Dhaka_1207
Bangladesh
Timetable
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 08 Nov 2018

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
ADB 526.00 - 0.00 0.00 %
Counterpart 0.26 Cumulative Disbursements
Cofinancing 0.00 - 0.00 0.00 %

TA 9344-BAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
18 Jul 2017 12 Jul 2018 12 Jul 2018 31 Mar 2020 31 Mar 2021 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
750,000.00 0.00 0.00 0.00 0.00 0.00 750,000.00 18 Jul 2017 66,600.00

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.

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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.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


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Tenders

Tender Title Type Status Posting Date Deadline
Capacity Development for Infrastructure Development Company Limited Firm - Consulting Closed 18 Jul 2018 16 Aug 2018

Contracts Awarded

Contract Title Approval Number Contract Date Contractor Contractor Address Executing Agency Contract Description 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 Consulting Services 511,820.00

Procurement Plan

None currently available.