The information came from the Public-Private Partnership Monitor, which tracks the development of the public-private business environment across ADB member countries. Nine countries were included in the first edition of the report, namely Bangladesh, Vietnam, the People’s Republic of China (PRC), Papua New Guinea, India, the Philippines, Indonesia, Thailand, and Kazakhstan.
The report reveals that countries in Asia and the Pacific with developed financial markets, diverse financing resources, and strong local financial institutions are more likely to secure public-private partnerships (PPP) projects.
“PPPs are crucial contributors to the development of countries in the Asia and Pacific region, but an enabling environment is required for these projects to succeed,” said ADB President Takehiko Nakao.
Nakao also added that the report aims to benefit both policymakers and investors by providing information and data on the business environment for PPPs over time, enabling them to make informed decisions and better manage risk.
This year’s report spotted key trends such as the emergence of energy generation as one of the most successful sectors in developing PPP frameworks. The water sector is also a sizable area for PPP investment; in fact, 40% of the PPP projects in the PRC are in this sector.
Private sector participation in social infrastructure sectors is relatively new, and challenges remain in further developing PPP.
However, PPP Specialist in the Office of the Public-Private Partnership Alexander N. Jett said that there are many ways to overcome these challenges such as using credit enhancements to attract better financing terms and reducing restrictions on foreign ownership in PPP contracts.
“Strengthening the institutional capacity to screen and prioritize projects can also help countries develop a credible pipeline of PPPs, while the development of sector specific regulation for non-energy sectors would address concerns about key bankability issues, such as foreign exchange risk,” added Jett.