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
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2009-10
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2012-08-13
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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.
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“World Bank. 2009. 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. Private Participation in Infrastructure Database; PPI Data Update; No. 24. © World Bank. http://hdl.handle.net/10986/11107 License: CC BY 3.0 IGO.”
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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(World Bank, Washington, DC, 2009-10)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). 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In the process, it provides a primer on the associated policy issues, including of the central role of project finance in the implementation of PPP policies and the debates on risk allocation in the design of PPPs. The paper also offers a discussion of the increasingly well recognized residual roles for the public sector in transport, with an emphasis on the regulatory debates surrounding the adoption of PPPs.Publication Private Activity in Telecommunications Recovered in 2010 But Remained Below Pre-Financial Crisis Levels(World Bank, Washington, DC, 2011-08)In 2010, eight new telecom projects with private participation reached financial or contractual closure in seven low and middle income countries. These projects involved investment commitments of US$4.2 billion. Telecommunications projects implemented in the 1990-2009 period attracted new investment of US$67 billion, bringing total investment commitments to the sector to US$71.2 billion in 2010. Total investment in the sector grew by 15 percent in 2010 compared with 2009, recovering from the sharp drop in 2009, but remained below the pre-financial crisis levels of 2007-08. The number of new projects reaching financial closure (eight) was the lowest of the entire period of 1990-2010), suggesting that activity in most countries focused on network expansion of existing operators rather than increasing the number of operators. Certainly, telecommunications operators in many developing countries have merged or consolidated in the last few years.
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