China, People's Republic of : Financing Public–Private Partnerships

Sovereign Project | 48377-001

Project Details

  • Project Officer
    An, Bo
    East Asia Department
    Request for information
  • Country/Economy
    China, People's Republic of
  • Modality
  • Sector
    • Public sector management
Project Name
Financing Public–Private Partnerships
Project Number
48377-001
Country / Economy
  • China, People's Republic of
Project Status
Closed
Project Type / Modality of Assistance
  • Technical Assistance
Source of Funding / Amount
TA 8869-PRC: Financing Public"Private Partnerships
Source Amount
Technical Assistance Special Fund US$ 400,000.00
Strategic Agendas
  • Inclusive economic growth
Drivers of Change
  • Governance and capacity development
Sector / Subsector
  • Public sector management / Public administration

Gender
No gender elements
Description
Project Rationale and Linkage to Country/Regional Strategy
Impact

Improved operational framework for the government to provide financial support to PPPs

Project Outcome

Description of Outcome

Consideration by decision-makers of new tools for government to provide financial support to PPPs

Progress Toward Outcome
The TA has been competed in 31 December 2016.

Implementation Progress

Description of Project Outputs

1. Assessment of the international experience with funds providing government financial support to PPPs

2. Options analysis of funds for providing government financial support to PPPs

3. Design and operating procedures of a fund for providing government financial support to PPPs

4. Comparison of a PPP fund with direct budget support to PPPs

5. Widely accessible publication on PPP funds

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

All consultants have been engaged.

An international workshop attended by representatives from central governments, the financial and consulting sectors, academia, and development partner institutions was conducted in June 2015. The workshop was organized by China PPP Centre, Ministry of Finance, PRC and ADB. The workshop focused on PPP financing, risk management for PPPs and implications for the PRC. Workshop presentations were released at the web site of the China PPP Centre.

A report has been prepared on the international experience with PPP funds, has been circulated for review, and is now being readied for publication by ADB.

The national consultant team has submitted its main report on the PRC's PPP funds and how they can be strengthened. The report draws on the experience with PPP funds in Henan, Shandong, Fujian, Jiangsu and Yunan provinces. The report also covers recent legislative developments and provides suggestions on the establishment of new funds.

International and national consultants subsequently focused on the challenges banks are facing in financing the PRC's 'new' PPPs. There was consensus on the continuing relevance of PPP funds, and the need to carefully design such funds to fill market gaps. New fund proposals were identified.

Close attention was paid to the dependence of many of the PRC's new PPPs on government contributions (around 60% of the 8,644 PPPs under development or implementation as of mid-2016, worth almost $1.7 trillion in total, are government pay's PPPs) in the face of uncertainty of the credit worthiness of many local governments.

A business cases for a proposed Credit Enhancement Facility has been prepared drawing on initial market testing with banks, PPP advisors, and local government. The facility would cover government risk in PPPs. It would make payments to the social capital partner if the local government is late to do so. The facility would then recover the funds from the local government, while charging for the service it provides. To provide a sustainable solution, the credit enhancement facility would need to be independent, well resourced, and operate on commercial principles.

The proposed facility can ensure that governments, and not social capital partners, bear the risk that governments will not meet their commitments to PPPs. It implements a key principle of PPPs; risk should be borne by the partner best able to manage it. The risk that governments will not meet their contributions to PPPs is a risk best borne by government. If instead the risk is passed to the social capital partner, governments will pay too much for their PPPs and some good projects may not proceed.

Market testing of the credit enhancement facility is continuing and an implementation plan is in preparation. The design of a model viability gap fund suited to the PRC is also in preparation.

The Business Case for the Public-Private Partnership Credit Enhancement Facility has been completed and submitted by the consultants in July 2016.

Geographical Location

Summary of Environmental and Social Aspects

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples

Stakeholder Communication, Participation, and Consultation

During Project Design
TA design took into account views of key stakeholders. The need for the participation of key stakeholders in implementation has been built into the design.
During Project Implementation
The China PPP Centre will lead the engagement with stakeholders and outreach during TA implementation.

Business Opportunities

Consulting Services

ADB will engage the international and national consultants, as well as resource persons, in accordance with its Guidelines on the Use of Consultants (2013, as amended from time to time). The proceeds of the TA will be disbursed in accordance with the Technical Assistance Disbursement Handbook (2010, as amended from time to time).

The TA will engage two international consultantsPPP advisor and a financial advisor and a PPP advisorfor a total of 2.5 person-months, and 6 national consultantsa team leader, a PPP advisor, two financial advisors, a legal advisor, and a coordinatorfor a total of 12.5 person-months. Given the need for an early commencement of implementation, and because no single firm can be expected to provide well-qualified consultants for the full range of diverse and specialized technical skills and country experience required for the TA, the consultants will be hired individually.

Contact

Responsible ADB Officer
An, Bo
Responsible ADB Department
East Asia Department
Responsible ADB Division
Public Mgt, Financial Sector and Regional Coop Division, EARD
Executing Agencies
Ministry of Finance

Timetable

Concept Clearance
07 Nov 2014
Fact Finding
15 Sep 2014 to 23 Sep 2014
MRM
-
Approval
23 Dec 2014
Last Review Mission
-
Last PDS Update
28 Mar 2017

Funding

TA 8869-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
23 Dec 2014 02 Mar 2015 02 Mar 2015 31 Dec 2016 - 03 Apr 2017
Financing Plan/TA Utilization
ADB Cofinancing Counterpart Total
Gov Beneficiaries Project Sponsor Others
400,000.00 0.00 0.00 0.00 0.00 0.00 400,000.00
Cumulative Disbursements
Date Amount
17 Jun 2022 325,384.26

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.

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.

Title Document Type Document Date
Financing Public–Private Partnerships: Technical Assistance Completion Report TA Completion Reports Jul 2020
Financing PPP: Business Case for the PPP Credit Enhancement Facility Consultants' Reports Jul 2016
融資PPP :為PPP信用增強基金業務案例 Consultants' Reports Jul 2016
PPP Financing and Risk Management: International Workshop Report Documents Produced Under Grant/Loans/TA Jun 2015
PPP融资与风险管理 : 国际研讨会 Documents Produced Under Grant/Loans/TA Jun 2015
Financing Public-Private Partnerships: Technical Assistance Report Technical Assistance Reports Dec 2014

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.

None currently available.


Evaluation Documents See also: Independent Evaluation

Title Document Type Document Date
People’s Republic of China: Financing Public–Private Partnerships Validation of Technical Assistance Completion Reports Apr 2021

Related Publications

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.

Tenders

No tenders for this project were found.

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.