42180-019: Third Public-Private Infrastructure Development Facility-Tranche 2 | Asian Development Bank

Bangladesh: Third Public-Private Infrastructure Development Facility-Tranche 2

Sovereign (Public) Project | 42180-019 Status: Proposed

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 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 Name Third Public-Private Infrastructure Development Facility-Tranche 2
Project Number 42180-019
Country Bangladesh
Project Status Proposed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan: Third Public-Private Infrastructure Development Facility (Tranche 2)
Ordinary capital resources US$ 250.00 million
concessional ordinary capital resources lending / Asian Development Fund US$ 16.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
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 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 (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, 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 Increased investments in infrastructure including renewable energy facilities (Draft Final Seventh Five-Year Plan 2016-2020)
Outcome Private sector participation in infrastructure development, including in RE facilities lever aged
Outputs

Available long-term debt financing for infrastructure projects increased

Takeout financing for infrastructure projects catalyzed

IDCOL's institutional capacity strengthened

Geographical Location
Safeguard Categories
Environment FI
Involuntary Resettlement FI
Indigenous Peoples FI
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design Not applicable
During Project Implementation Not applicable
Responsible ADB Officer Huang, Anqian
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 -
Fact Finding -
MRM 13 Jun 2019
Approval -
Last Review Mission -
Last PDS Update 15 Sep 2017

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