ADB to help Pakistan increase infrastructure PPPs

15 May 18

The Asian Development Bank and the Pakistan government have agreed to work together to ‘upscale’ public private partnerships in the country.

The two agreed to lever in more resources from the private sector to meet the Pakistan’s growing infrastructure development needs, at a recent three-day consultative workshop.

ADB country director for Pakistan Xiaohong Yang called for closer coordination and consultation between the development bank and its partners to improve investment programmes in the south Asia country.

She said: “Project financing in Pakistan is only offered by a few commercial banks, with little or no role of capital markets or other financial institutions.

“This leads to lack of sufficient financial depth and backing in the country’s domestic credit markets to accommodate the long-gestation of infrastructure projects. Meantime, we are in short supply of well prepared and bankable PPPs pipeline.”

Pakistan and the bank reached the agreement during the three-day workshop on the ADB Country Programming and Public-Private Partnerships in Pakistan.

The South Asian country’s infrastructure investments have dropped short of the estimated annual need of 7.6% of GDP.

It is predicted it needs to invest more than $20bn per year in infrastructure.

The ADB is already providing $200m in loans for projects supporting PPPs in Punjab and Sindh.

Yang said: “I really appreciate the Sindh and Punjab provincial governments’ efforts to develop their investment frameworks to provide an enabling environment for private sector to invest in infrastructure.

“The private sector has responded positively, and I can feel the positive vibes from the success of PPP modalities in Sindh and Punjab.

“Yet, more need to be done to create an effective fiscal risk vetting and management regime for greater private sector partnership in the public sector.”

The aim of the ADB's investment in Pakistan is to assist provincial government efforts in increasing the commercial viability of projects and encouraging more private-sector participation in infrastructure.

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