66327 PPI data update note 56 August 2011 Private activity in infrastructure in East Asia and Pacific declined for third consecutive year in 2010 In 2010, 36 infrastructure projects with private participation reached financial or contractual closing in seven low and middle-income countries, involving investment commitments of US$10.9 billion (table 1). 1 Infrastructure projects implemented in the 1990–2009 period attracted new investment of US$4.3 billion, bringing total investment commitments to infrastructure in the region to US$15.2 billion in 2010. 2 The activity in 2010 represents a 9% decline by investment and 45% drop by number of projects compared with 2009. China, which saw the number of projects fall by 60% compared with 2009, explained the large decline in activity by number of projects. 3 Investments in new projects fell by 9% and in projects implemented in previous years by 10% compared with 2009. Investment in the region was concentrated in the 1,470 MW Hongsa coal-fired power plant, which will export electricity from Lao PDR to Thailand (24% of regional investment in 2010), as well as in Indonesia (22%) and the Philippines (19%). China saw private activity decline significantly in 2010, accounting for just 6% of regional investment and 47% of the projects. By type of private participation, activity was concentrated on greenfield projects (BOT and BOO), which attracted 87% of regional investment and 30 of the 36 new projects (figure 1). Concessions followed with 3% of investment and five projects. Divestitures accounted for the remaining 10% of the investment and one new project. Figure 1 Investment in PPI projects in East Asia and Pacific, Figure 2 Investment in PPI projects in East Asia and Pacific, by type of PPI, 1990‒2010 by sector, 1990‒2010 2010 US$ billions* 2010 US$ billions* 60 Projects 140 60 50 120 50 100 40 40 80 30 30 60 20 20 40 10 20 10 0 0 0 1990 1995 2000 2005 2010 1990 1995 2000 2005 2010 Concession Divestiture Greenfield project New projects Energy Telecom Transport Water and sewerage * Adjusted by US CPI. * Adjusted by US CPI. Source: World Bank and PPIAF, PPI Project database. Source: World Bank and PPIAF, PPI Project database. Energy had 18 projects in six countries and investment of US$10.3 billion in 2010. This represents a 26% increase from the level in 2009. Energy accounted for 68% of regional investment in 2010 (figure 2). • Electricity generation attracted almost all of this activity, accounting for 17 projects and US$10.2 billion in investment. These projects represented a total installed capacity of 5.6 GW. The remaining project was a transmission line in Cambodia. • The four largest projects accounted for 70% of the regional investment in energy. Besides the export oriented Hongsa coal-fired power plant, the other large projects were GNPower Mariveles coal power This note was written by Koustubh Parulekar, consultant, Finance, Economics, and Urban Development Department, Sustainable Development Network, World Bank. 1 The PPI Project Database currently uses the FY10 World Bank country classification released in July 2010. Investment data are in 2010 US dollar using the US CPI to adjust to 2010 values. 2 Data on infrastructure projects with private participation include primarily medium-size and large projects in low and middle income countries as reported by the media and other public sources. Small-scale projects are generally not included because of lack of public information. More information is available at http://ppi.worldbank.org/. 3 It should be note that beside the lower level of activity in China, these data also reflect the lower coverage of the PPI Database in China this year due to limited access to local sources this update. 1 Plant, a merchant power plant in the Philippines, and Paiton III and Ciberon power plants selling electricity under Power Purchase Agreements to PNL, the state-owned electric utility in Indonesia. • Cambodia implemented five projects (four power plants with a total capacity of 1 GW and one transmission line). Indonesia had two power plants with a total capacity of 1.5 GW and the Philippines three projects with 950 MW. Thailand implemented four small projects with a total capacity of 327 MW. Laos PDR had one 100 MW power plant beside Hongsa power plant. • China implemented two wind-power projects, the lowest activity in the country since the early 1990s. Telecom had no new project, but existing projects attracted investment of US$3.5 billion. This represents a 27% drop from the level in 2009. The sector accounted for 23% of regional investment in 2009. • Investment went mainly to mobile operators (56%) and multi-service providers (44%). Transport had three new projects in two countries and investment of US$751 million. This investment is an 76% drop from the level reported in 2009. Transport accounted for 5% of regional investment in 2010. • The Philippines implemented two concessions for seaports: North Harbor concession and Batangas Port Phase 2. • Vietnam implemented a seaport under a BOT contract: Cai Lan International Container Terminal LLC. • In addition, Malaysia sold a 13.7% stake in Malaysia Airports Holdings Bhd in two tranches in 2010, bringing the divested share in the company to 31%. The first divestiture of Malaysia Airports’ shares took place in 1999. Water and sewerage had 15 new projects and investment of US$635 million. This represents a 13% increase from the level in 2009. The sector accounted for 4% of regional investment in 2010. • All 15 new projects were in China. This activity represented a 52% drop by number of projects and the third consecutive year of significant slowdown of private activity in China. • The sale of a 5.7% stake in Chongqing Water Affairs, a water utility in Chinese Chongqing Municipality, through a public offering accounted for the 81% of sector investment. This project was also the only utility project in the region in 2010. Chongqing Water Affairs first attracted private participation in 2008 when Sino French Water, a joint venture between French Suez and Hong Kong based NWS Holdings, acquired a 15% stake in the company. • The remainder of private activity in the sector went to wastewater treatment plants which accounted for 14 of the 15 water projects. 2 Table 1. Projects with private participation reaching financial or contractual closure in East Asia and Pacific in 2010 Energy Total Country Project name Type of PPI (Subtype) Segment Investment* Sponsor Cambodia Cambodia Energy Limited Greenfield project (BOO) Electricity generation 140 Leader Universal Holdings (100% / ..) Cambodia North Phnom Penh - Kampong Greenfield project (BOT) Electricity transmission 107 Leader Universal Holdings (100% / ..) Power Transmission Cambodia Orussei Hydroelectric Power Greenfield project (BOT) Electricity generation 558 China Huadian Corporation (100% / Plant China) Cambodia Stung Russey Chrum Krom Greenfield project (BOT) Electricity generation 412 China Huadian Corporation (100% / Hydropower Plant China) Cambodia Stung Tatay Hydropower Plant Greenfield project (BOT) Electricity generation 540 China National Heavy Machinery Corporation (100% / China) China Gansu Guazhou Xiehe Wind Greenfield project (BOT) Electricity generation 249 China Windpower Group Limited Power Project (100% / China) China Jilin Taobei Baoshan Wind Greenfield project (BOO) Electricity generation 58 Ashmore Energy International (AEI) Farm Project (100% / United States) Indonesia Cirebon Coal-fired Power Plant Greenfield project (BOT) Electricity generation 850 Marubeni Corp. (33% / Japan), PT Tripatra (20% / Indonesia), Samtan (20% / Korea, Rep.), Korea Midland Power Corporation (KOMICO) (28% / Korea, Rep.) Indonesia Paiton III Thermal Power Plant Greenfield project (BOO) Electricity generation 1,450 Mitsui (50% / Japan), International Power (32% / United Kingdom) Lao PDR / Hongsa Coal Power Project Greenfield project (BOT) Electricity generation 3,710 Ratchaburi Electricity Generating Thailand Holding Plc (40% / Thailand), Banpu Public Company (40% / Thailand) Lao PDR Nam Lik 1-2 Hydropower Plant Greenfield project (BOT) Electricity generation 150 China International Water and Electric Corporation (90% / China) Philippines BacMan Geothermal Power Full divestiture Electricity generation 28 Energy Development Co (EDC) Plant (100% / Philippines) Philippines Cebu Coal-fired Power Plant Greenfield project (BOO) Electricity generation 451 Korea Electric Power Company (KEPCO) (60% / Korea, Rep.), Salcon Bhd (40% / Malaysia) 3 Philippines GNPower Mariveles Coal Greenfield project (BOO) Electricity generation 1,000 GN Power (100% / Philippines) Power Plant Thailand Amata B. Grimm Power 3 Ltd. Greenfield project (BOO) Electricity generation 156 Amata Power Co. Ltd (100% / Thailand) Thailand Changwat Lopburi Power Greenfield project (BOO) Electricity generation 250 Mitsubishi (34% / Japan), China Light Project and Power Ltd. (34% / Hong Kong, China), Electricity Generating Company (EGCO) (34% / Thailand) Thailand Navanakorn Gas-Fired Power Greenfield project (BOO) Electricity generation 133 Toyo-Thai Corporation Public Plant Company Limited (71% / Thailand), Nava Nakorn Public Company Limited (NNCL) (29% / Thailand) Thailand Sakon Nakorn and Nakorn Greenfield project (BOO) Electricity generation 51 Steel Intertech Public Company Phanom Solar Power Plants Limited (100% / Thailand) Transport Total Sponsor Country Project name PPI (Subtype) Sub-sector Investment* Philippines Batangas Port Phase 2 Concession (ROT) Seaport 22 Asian Terminal, Inc. (100% / Philippines) Philippines North Harbor concession Concession (ROT) Seaport 321 San Miguel Corporation (SMC) (35% / Philippines), Harbour Centre Port Terminals (65% / Philippines) Vietnam Cai Lan International Greenfield project (BOT) Seaport 155 Carrix (49% / United States) Container Terminal LLC 4 Water and sewerage Country Project name PPI (Subtype) Segment Total Sponsor Investment* China Hunan Yongshun County Wastewater Greenfield project (BOT) Sewerage treatment plant 13.5 Kaiyuan Enrionemtnal Protection Treatment Plant Equipment Co Ltd (100% / China) China Liaoyang City River East New City Water Greenfield project (BOT) Water utility without sewerage 36.0 United Envirotech (100% / Affairs Project Singapore) China Nantong Pingchao Wastewater Treatment Greenfield project (BOT) Sewerage treatment plant 1.5 Suzhou Zhongsheng Environmental Plant Engineering Co., Ltd (100% / China) China Nantong Shigang Wastewater Treatment Greenfield project (BOT) Sewerage treatment plant 1.5 Suzhou Zhongsheng Environmental Plant Engineering Co., Ltd (100% / China) China Ningguo Gangkouzhen Wastewater Greenfield project (BOT) Sewerage treatment plant Not Available Zhejiang Shangda EP Co. Ltd. (..% / Treatment Plant China), Ningguo Huanneng Construction Co. Ltd. (..% / China) China Panjin City No. 2 Wastewater Treatment Concession (ROT) Sewerage treatment plant Not Available BerlinWasser (100% / Germany) Plant China Qinzhou Economic Development Zone Greenfield project (BOO) Sewerage treatment plant 9 SembCorp Industries (80% / Wastewater Treatment Plant Singapore) China Shaoyang Hongqiqu Wastewater Treatment Greenfield project (BOT) Sewerage treatment plant Not Available Hunan Capital Investment Co. Ltd Plant (100% / China) China Shenze County City South Wastewater Greenfield project (BOT) Sewerage treatment plant 5.2 Changye Group (100% / China) Treatment Plant China Tongliang County City East Wastewater Greenfield project (BOT) Sewerage treatment plant 3.8 Chongqing Taixing Environmental Treatment Plant Protection Engineering Co., Ltd (100% / China) China Yibin City Yangwan Wastewater Treatment Greenfield project (BOT) Sewerage treatment plant 8.8 Sichuan Huajian uanbo Investment Plant Co., Ltd (..% / China), Ziyang Haitian Water Affairs Co., Ltd. (..% / China) China Zaozhuang City Yicheng District Concession (ROT) Sewerage treatment plant Not Available Lianheruntong (100% / China) Wastewater Treatment Plant 5 China Zengcheng Xintang Wastewater Treatment Greenfield project (BOT) Sewerage treatment plant Not Available Shenzhen Zhujiang EP Investment Plant (..% / China), Citic Pacific (..% / Hong Kong, China) China Zhangjiakou Xuanhua District Yangfang Concession (ROT) Sewerage treatment plant 39 Kaidan Water Affairs Co Ltd (100% / Wastewater Treatment Plant Israel) China Zhuozhou Songlindian Wastewater Greenfield project (BOT) Sewerage treatment plant Not Available Hubei Keliang Bio-Tech Co (100% / Treatment Plant China) Note: BOT= Build, Operate, and Transfer; BOO = Build, Own, and Operate; ROT = Rehabilitate, Operate, and Transfer; Concession (BROT) = Build, Rehabilitate, Operate, and Transfer. *in current US$ millions Source: World Bank and PPIAF, PPI Database. 6