Publication: New Private Infrastructure Activity in Developing Countries Recovered in the First Half of 2009 Thanks to the Electricity Sector, But the Crisis Continues to Impact Projects
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2009-10
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2012-08-13
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New private activity in infrastructure continues to take place in developing countries despite the financial and economic crisis. New projects are being tendered and brought to financial or contractual closure. Measured by amount of investment, the rate of project closure grew by 2 percent in the first half of 2009 compared to the first half of 2008, indicating a strong recovery from the decline of 48 percent experienced in the second half of 2008. This recovery, however, was driven by large projects. Measured by number of projects reaching closure, the rate of project closure continues to be slower than before the full-scale onset of the financial crisis. The number of projects reaching closure in the first half of 2009 was 20 percent lower than the number reported in the first half of 2008. This trend suggests greater project selectivity. Indeed, those projects that are reaching closure are characterized by strong economic and financial fundamentals, the backing of financially solid sponsors and governments. Developing country governments' continuing commitment to their public-private partnership (PPP) programs is confirmed by the number of new projects tendered and awarded. However, current market conditions are forcing governments and investors to restructure projects to improve financial viability. Local public banks as well as bilateral and multilateral agencies continue to be active in project finance, providing a critical amount of funding. It is too early to assess the full impact of the crisis on new infrastructure projects with private participation (PPI). The crisis continues to make financing (both debt and equity) more difficult to secure, and hamper the ability of governments to maintain financial commitments to public-private infrastructure projects.
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“Izaguirre, Ada Karina. 2009. New Private Infrastructure Activity in Developing Countries Recovered in the First Half of 2009 Thanks to the Electricity Sector, But the Crisis Continues to Impact Projects. PPI Data Update; Note No. 24. © World Bank. http://hdl.handle.net/10986/10969 License: CC BY 3.0 IGO.”
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Publication Assessment of the Impact of the Crisis on New PPI Projects - Update 4 : New Private Infrastructure Activity in Developing Countries Recovered in the First Half of 2009 Thanks to the Electricity Sector, But the Crisis Continues to Impact Projects(World Bank, Washington, DC, 2009-10)This review of new private participation in infrastructure (PPI) projects, covering the period up to June 2009, sheds some light on the recent activity and the short-term impact of the financial crisis, compared with the previous updates on the impact of the crisis, this note incorporates several improvements: a larger sample size (714 projects versus 522 in the previous update) over a longer period of time (from January 2008 to June 2009 compared to the previous update, which covered January 2008 to March 2009). The survey finds that the financial crisis significantly affected the rate of project closure rate of new PPI projects in the second half of 2008. The impact of the crisis varies across developing regions with Europe and Central Asia (ECA) being the most affected region so far. This analysis will be refined in the coming quarters to assess the extent to which these trends continue.Publication Assessment of the Impact of the Crisis on New PPI Projects : Update Three(World Bank, Washington, DC, 2009-06)Despite the financial and economic crisis, new private activity in infrastructure continues to take place in developing countries. New projects are still being tendered and brought to financial closure, but at a slower pace. Between July 2008 and March 2009, the rate of project closure fell 15 percent by investment compared to a similar period in the previous year. Investment commitments to private infrastructure projects showed some signs of recovery in the first months of 2009, but this recovery was driven by a few large priority projects in select countries. These projects were able to raise financing thanks to the backing of highly-rated sponsors and their priority status in their respective countries. The financial crisis has made financing (both debt and equity) more difficult to secure, and has hampered the ability of governments to maintain their financial commitments to private infrastructure projects. These projects are facing higher cost of financing a problem compounded by the lower demand for infrastructure services that is beginning to impact some sectors. As a result some planned private infrastructure projects are being delayed, restructured, and, to a lesser extent, cancelled. Transport is the worst affected sector so far, while the most affected group of countries are middle-income countries, especially in the Eastern Europe and Central Asia region.Publication New Private Infrastructure Projects in Developing Countries Continue to Take Place But Projects are Being Affected by the Financial Crisis(World Bank, Washington, DC, 2009-03)Throughout the financial crisis, new private activity has continued to take place in developing countries with projects being tendered and brought to financial closure. In the first months of the full-scale of the financial crisis (Aug-Nov 2008), the rate of project closure was 26 percent lower than in the same period in 2007. However, since then private activity recovered and the project closure rate in Aug-Dec 2008 was just 15 percent lower than in the same period in the previous year. The slowdown reflects an initial impact of the financial crisis which has made financing (both debt and equity) more onerous and difficult to secure. Infrastructure projects are facing higher cost of financing, and lower demand for infrastructure services is beginning to impact some sectors. The major impact to date is projects being delayed, and, to a lesser extent, cancelled. Transport and energy are the worst affected sectors so far, while Europe and Central Asia (ECA) and upper middle income countries are the most affected groups of countries. It is too early to assess the full impact of the crisis on new Public Private Infrastructure (PPI) projects. Financial markets remain volatile while the financial crisis has now turned into a global economic crisis. 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