The proposed knowledge and support technical assistance (TA) will support the enabling environment for infrastructure financing in Pakistan through capacity development, and research and policy advice for supporting the legal and institutional framework of infrastructure financing, public private partnerships (PPPs), and public debt management. The proposed TA will also fund the preparation of a target infrastructure project to be delivered as a PPP project.
The TA is included in the current COBP 2017-19 for Pakistan. Outputs of the TA will also support the policy lending reforms for program loans in the area of public financial management.
Project Name | Strengthening the Federal Public–Private Partnership Framework and Enabling Reforms for Infrastructure Financing Support | ||||
Project Number | 51351-001 | ||||
Country | Pakistan |
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Project Status | Active | ||||
Project Type / Modality of Assistance | Technical Assistance |
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Source of Funding / Amount |
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Strategic Agendas | Inclusive economic growth |
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Drivers of Change | Governance and capacity development Knowledge solutions Partnerships |
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Sector / Subsector | Finance / Finance sector development |
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Gender Equity and Mainstreaming | No gender elements | ||||
Description | The proposed knowledge and support technical assistance (TA) will support the enabling environment for infrastructure financing in Pakistan through capacity development, and research and policy advice for supporting the legal and institutional framework of infrastructure financing, public private partnerships (PPPs), and public debt management. The proposed TA will also fund the preparation of a target infrastructure project to be delivered as a PPP project. The TA is included in the current COBP 2017-19 for Pakistan. Outputs of the TA will also support the policy lending reforms for program loans in the area of public financial management. |
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Project Rationale and Linkage to Country/Regional Strategy | The economic growth in Pakistan has been hampered by the lack of investments in critical and quality public infrastructure over the years. Public investment on infrastructure has been on a decline over the last decade with the government investing just over 2% of gross domestic product (GDP) towards infrastructure, until recently. This has resulted in inefficiencies across the key infrastructure sectors (like road, rail, port, & aviation) estimated to be costing the economy over 4% of GDP. These inefficiencies have negatively impacted the country's overall industrial and economic growth. A study by the Asian Development Bank Institute (ADBI) suggests that for Pakistan to meet its growing demand it will require to invest about $81 billion in infrastructure over the next 5 years (or just over $16 billion annually from 2016 to 2020). Project financing from local commercial banks was about PRs 471 billion ($4.5 billion) at the end of 2016. A significant number of public infrastructure projects in Pakistan are financed by the government which in the past 2 years has allocated about $4 billion annually from its federal public sector development budget to infrastructure investment. However, the government's resources are constrained with the government operating under a budget deficit of 3.7 % of GDP in July-March 2016-2017. These funding constraints highlight not only the need to mobilize additional funding from other sources but more importantly the need to encourage higher private sector participation. Private sector participation through PPPs would enhance resource mobilisation for public infrastructure development and create a sustainable source of financing with positive impacts on growth, jobs and poverty reduction. The success of the PPP modality relies on the presence of a sound legal, regulatory and institutional frameworks and effective capacity building to identify evaluate and prepare a robust pipeline of potential PPP transactions. Financing of infrastructure by the private sector bridges financing gap and assists in alleviating poverty by the additional jobs created by such investments. It also helps ease fiscal constraints of the government by allowing the private sector to shoulder part of the financing burden of public infrastructure development. Project financing of public infrastructure with majority private sector participation introduces commercial discipline in allocating and pricing project risks. The government's inefficient public debt management also contributes negatively to the project lending practices of local commercial banks. The government's strong preference to borrow from the local banking system, rather than tap the international capital markets to address ongoing fiscal deficit, results in the local commercial banks holding significantly large portion of their assets (estimated at about 70%) in medium-term government issued securities. This in turn limits the local bank's capacity to invest in other assets by way of lending to infrastructure projects. Further, about 76% of project finance lending by local commercial banks are highly concentrated on energy and telecom projects which are typically backed by government guarantee. With the prevailing low inflation rate and the limited number of alternative investment opportunities, commercial banks are locking in significant portion of their assets in long-dated (in some cases up to 10 years) high-yielding zero-risk government issued securities. Although it can be considered a rationale investment approach from the banks' risk and return perspective, it creates inefficiency in the market and an undesirable effect as it limits the flow of much needed project financing to develop key infrastructure in other underserved sectors. Moreover, the debt capital markets are shallow and underdeveloped, with insignificant participation from the retail investors in government issued debt instruments. The federal government has initiated several reforms encompassing PPP legal framework at federal level (PPP Authority Act 2017), proposed creation of viability gap fund, reforms on the public debt management and capital markets. It has also attempted to operationalize a government institution that will assist in the financing of key infrastructure and PPP projects through the Pakistan Development Fund Limited (PDFL) . However, the framework is at a nascent stage and there is a growing need for a careful analysis of the gaps in the existing PPP framework and public debt management policy to ensure effective institutional, regulatory and financial mechanisms. |
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Impact | Informed decision making by government for reform for increasing infrastructure development in line with the Government's growth aspiration and the Pakistan Vision 2025 |
Project Outcome | |
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Description of Outcome | Identification of possible reforms to overcome the impact of existing gaps in PPP framework constraining infrastructure financing, and support in implementation of said reforms. |
Progress Toward Outcome | |
Implementation Progress | |
Description of Project Outputs | 1. Support for development of institutional, legal, and regulatory framework for PPPs provided. 2. Support for operationalization of PDFL provided 3. Infrastructure finance and PPP capacities enhanced in the Finance Division, Planning Commission, and key line ministries. 4. Potential areas of reform for development of long term debt capital markets identified. |
Status of Implementation Progress (Outputs, Activities, and Issues) | |
Geographical Location | Nation-wide |
Summary of Environmental and Social Aspects | |
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Environmental Aspects | |
Involuntary Resettlement | |
Indigenous Peoples | |
Stakeholder Communication, Participation, and Consultation | |
During Project Design | |
During Project Implementation |
Responsible ADB Officer | Masood, Sana |
Responsible ADB Department | Central and West Asia Department |
Responsible ADB Division | Pakistan Resident Mission |
Timetable | |
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Concept Clearance | 07 Dec 2017 |
Fact Finding | 15 Sep 2017 to 14 Nov 2017 |
MRM | - |
Approval | 13 Dec 2017 |
Last Review Mission | - |
Last PDS Update | 15 Jan 2018 |
TA 9467-PAK
Milestones | |||||
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Approval | Signing Date | Effectivity Date | Closing | ||
Original | Revised | Actual | |||
13 Dec 2017 | 08 Jan 2018 | 08 Jan 2018 | 31 Dec 2020 | 30 Nov 2022 | - |
Financing Plan/TA Utilization | Cumulative Disbursements | |||||||
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ADB | Cofinancing | Counterpart | Total | Date | Amount | |||
Gov | Beneficiaries | Project Sponsor | Others | |||||
0.00 | 3,266,205.00 | 0.00 | 0.00 | 0.00 | 0.00 | 3,266,205.00 | 13 Dec 2017 | 711,921.87 |
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.
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
None currently available.
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
Tender Title | Type | Status | Posting Date | Deadline |
---|---|---|---|---|
Legal Expert – (Hospitality Sector) | Individual - Consulting | Closed | 02 Dec 2020 | 08 Dec 2020 |
Private Sector Development Expert - Hospitality Sector | Individual - Consulting | Closed | 26 Nov 2020 | 02 Dec 2020 |
Strategy and Project Management Expert | Individual - Consulting | Closed | 12 Nov 2020 | 18 Nov 2020 |
Senior Legal Expert 3 | Individual - Consulting | Closed | 28 May 2020 | 03 Jun 2020 |
Private Sector Development Expert | Individual - Consulting | Closed | 26 Mar 2020 | 04 Apr 2020 |
Legal Expert | Individual - Consulting | Closed | 26 Mar 2020 | 04 Apr 2020 |
Credit Risk Specialist (DPCO) | Individual - Consulting | Closed | 24 Sep 2019 | 30 Sep 2019 |
Market & Financial Risk Specialist 2 (DPCO) | Individual - Consulting | Closed | 24 Sep 2019 | 30 Sep 2019 |
Market & Financial Risk Specialist 1 (DPCO) | Individual - Consulting | Closed | 24 Sep 2019 | 30 Sep 2019 |
External Finance Expert (DPCO) | Individual - Consulting | Closed | 24 Sep 2019 | 30 Sep 2019 |
Research Associate (DPCO) | Individual - Consulting | Closed | 24 Sep 2019 | 30 Sep 2019 |
National Senior Legal Expert 2.0 | Individual - Consulting | Closed | 07 Aug 2019 | 13 Aug 2019 |
Consulting Firm | Firm - Consulting | Closed | 29 Jun 2019 | 08 Jul 2019 |
Project Research and Coordination Lead | Individual - Consulting | Closed | 25 May 2019 | 31 May 2019 |
Financial Markets Expert | Individual - Consulting | Closed | 24 Apr 2019 | 30 Apr 2019 |
Infrastructure Financing Expert 3 (Housing Finance Specialist) | Individual - Consulting | Closed | 09 Apr 2019 | 15 Apr 2019 |
PPP Expert 2 (int'l) | Individual - Consulting | Closed | 14 Jan 2019 | 27 Jan 2019 |
Finance Specialist - MOF (Private Sector Development Expert 1) | Individual - Consulting | Closed | 28 Dec 2018 | 03 Jan 2019 |
Infrastructure Financing Expert 2 | Individual - Consulting | Closed | 04 Dec 2018 | 10 Dec 2018 |
Financial Markets Expert 2 (Capital Market Development) | Individual - Consulting | Closed | 01 Aug 2018 | 07 Aug 2018 |
Senior Legal Expert (nat'l) | Individual - Consulting | Closed | 05 Jun 2018 | 11 Jun 2018 |
Financial Markets Expert 1 (int'l) | Individual - Consulting | Closed | 02 May 2018 | 08 May 2018 |
Research Associate | Individual - Consulting | Closed | 18 Apr 2018 | 24 Apr 2018 |
Financial Markets Expert 4 (nat'l) | Individual - Consulting | Closed | 05 Apr 2018 | 11 Apr 2018 |
Financial Markets Expert 3 (nat'l) | Individual - Consulting | Closed | 05 Apr 2018 | 11 Apr 2018 |
Infrastructure Financing Expert 4 (int'l) | Individual - Consulting | Closed | 14 Feb 2018 | 20 Feb 2018 |
Legal Expert (int'l) | Individual - Consulting | Closed | 14 Feb 2018 | 20 Feb 2018 |
PPP Expert 1 (int'l) | Individual - Consulting | Closed | 14 Feb 2018 | 20 Feb 2018 |
Private Sector Development Expert 5 | Individual - Consulting | Closed | 14 Feb 2018 | 20 Feb 2018 |
Private Sector Development Expert 2 | Individual - Consulting | Closed | 14 Feb 2018 | 20 Feb 2018 |
Private Sector Development Expert 3 | Individual - Consulting | Closed | 14 Feb 2018 | 20 Feb 2018 |
Infrastructure Financing Expert 1 (nat'l) | Individual - Consulting | Closed | 14 Feb 2018 | 20 Feb 2018 |
Legal Expert | Individual - Consulting | Closed | 14 Feb 2018 | 20 Feb 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$) |
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Policy and Advisory | Technical Assistance 9467 | 14 Jan 2020 | REBELGROUP INTERNATIONAL BV (REBELGROUP)(NETHERLANDS) | WIJNHAVEN 23 3011 WH ROTTERDAM, NETHERLANDS | Ministry of Finance, Revenue and Economic Affairs | 706,123.00 | — |
Procurement Plan
None currently available.