Bangladesh: Third Public-Private Infrastructure Development Facility-Tranche 1
The proposed 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 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 catalyzing 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
Al Hasan, Mohammad Rashed
South Asia Department
Request for information -
Country
Bangladesh -
Sector
- Finance
Related Projects
| Project Name | Third Public-Private Infrastructure Development Facility-Tranche 1 | ||||||||
| Project Number | 42180-018 | ||||||||
| Country | Bangladesh |
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| Project Status | Active | ||||||||
| Project Type / Modality of Assistance | Loan |
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| Source of Funding / Amount |
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| Strategic Agendas | Environmentally sustainable growth Inclusive economic growth |
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| Drivers of Change | Gender Equity and Mainstreaming Partnerships Private sector development |
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| Sector / Subsector | Finance / Infrastructure finance and investment funds |
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| Gender Equity and Mainstreaming | Some gender elements | ||||||||
| Description | The proposed 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 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 catalyzing 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 (PPIDF3) 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 2016 -2020) | ||||||||
| Project Outcome | |
|---|---|
| Description of Outcome | Private sector investments in infrastructure, including RE leveraged |
| Progress Toward Outcome | a) As of September 2021, 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. |
| Implementation Progress | |
| Description of Project Outputs | Available long-term debt financing for infrastructure projects increased Take-out financing for infrastructure projects catalyzed IDCOL's institutional capacity strengthened |
| Status of Implementation Progress (Outputs, Activities, and Issues) | 1. Long-term debt financing for infrastructure projects catalyzed. As of September 2021, a total of $241.16 million was committed and $226.16 million disbursed under 9 subprojects. 2. Take-out financing for infrastructure projects catalyzed by means of refinancing in 2 (two) of the 9(nine) aforementioned subprojects. 3. Institutional capacity is being strengthened by means of developing several frameworks and arrangement of workshops. 20 Workshops arranged. |
| Geographical Location | Dhaka |
| Safeguard Categories | |
|---|---|
| Environment | FI |
| Involuntary Resettlement | FI |
| Indigenous Peoples | FI |
| Summary of Environmental and Social Aspects | |
|---|---|
| Environmental Aspects | 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 | 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 | 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. |
| Business Opportunities | |
|---|---|
| Consulting Services | not applicable |
| Procurement | There will be no procurement directly financed under the facility since procurement will be undertaken by the subproject sponsors in accordance with the procedures established by private sector or commercial practices acceptable to ADB and must align with the core principles of ADB's Procurement Guidelines (2015, as amended from time to time). |
| Responsible ADB Officer | Al Hasan, Mohammad Rashed |
| Responsible ADB Department | South Asia Department |
| Responsible ADB Division | Bangladesh Resident Mission |
| Executing Agencies |
Ministry of Finance Mr. M. Khurshed Alamm Economic Relations Division (ERD), MOF Sher-e-Bangla Nagar, Dhaka_1207 Bangladesh |
| Timetable | |
|---|---|
| Concept Clearance | - |
| Fact Finding | - |
| MRM | 26 Sep 2016 |
| Approval | 11 Aug 2017 |
| Last Review Mission | - |
| Last PDS Update | 28 Sep 2021 |
Loan 3554-BAN
| Milestones | |||||
|---|---|---|---|---|---|
| Approval | Signing Date | Effectivity Date | Closing | ||
| Original | Revised | Actual | |||
| 11 Aug 2017 | 19 Nov 2017 | 14 May 2018 | 31 Dec 2020 | 31 Dec 2021 | - |
| Financing Plan | Loan Utilization | ||||
|---|---|---|---|---|---|
| Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
| Project Cost | 510.00 | Cumulative Contract Awards | |||
| ADB | 250.00 | 18 Nov 2021 | 215.86 | 0.00 | 86% |
| Counterpart | 260.00 | Cumulative Disbursements | |||
| Cofinancing | 0.00 | 18 Nov 2021 | 215.86 | 0.00 | 86% |
Loan 3555-BAN
| Milestones | |||||
|---|---|---|---|---|---|
| Approval | Signing Date | Effectivity Date | Closing | ||
| Original | Revised | Actual | |||
| 11 Aug 2017 | 19 Nov 2017 | 14 May 2018 | 31 Dec 2020 | 31 Dec 2021 | - |
| Financing Plan | Loan Utilization | ||||
|---|---|---|---|---|---|
| Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
| Project Cost | 140.00 | Cumulative Contract Awards | |||
| ADB | 10.00 | 18 Nov 2021 | 10.30 | 0.00 | 100% |
| Counterpart | 130.00 | Cumulative Disbursements | |||
| Cofinancing | 0.00 | 18 Nov 2021 | 10.30 | 0.00 | 100% |
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Tenders
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Contracts Awarded
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Procurement Plan
None currently available.