Financing for DevelopmentFinancing for DevelopmentUnited NationsUnited Nations

Risk Mitigation for Mobilizing Private Sector Risk Mitigation for Mobilizing Private Sector Investments in Infrastructure in Developing Investments in Infrastructure in Developing

CountriesCountries

Pradeep SinghPradeep SinghPresident & CEOPresident & CEO

ILFS Infrastructure Development CorporationILFS Infrastructure Development CorporationIndiaIndia

The ParadoxThe Paradox

Capital in search of Investments with Steady Returns

Capital in search of Investments with Steady Returns

Great need for

Infrastructure

Great need for

Infrastructure

Guarantees as Instruments of Risk Guarantees as Instruments of Risk TransferTransfer

Lenders/Capital Markets

Preferred Lenders/Guarantee Providers

Government

Tax Payers

transfer of risk

transfer of risk

transfer of risk

thru guarantee

thru counter guarantee

thru fiat

Risk Management is the Aim of the Risk Management is the Aim of the GameGame

Equity Agreement

Loan Agreement

Design & Construction Agreement

Operation & Maintenance Agreement

Concession Agreement

Government DeptGovernment Dept

InvestorsInvestors

LendersLenders

Construction Construction ContractorsContractors

Operations & Operations & Management ContractorsManagement Contractors

Project Development is the name of the Project Development is the name of the GameGame

Technical ViabilityTechnical Viability

Financial Viability : Rate of Return Financial Viability : Rate of Return

Economic Viability : Financial Rate of Return Economic Viability : Financial Rate of Return

Adequate Economic Rate of ReturnAdequate Economic Rate of Return

Environmental and Social Management PlansEnvironmental and Social Management Plans

Contractual and Project Implementation StructureContractual and Project Implementation Structure

Conformity to public standards and transparencyConformity to public standards and transparency

Appropriateness of the Institutional and Legal FrameworkAppropriateness of the Institutional and Legal Framework

PROJECT PROJECT

DEVELOPMENTDEVELOPMENT

BANKABLE PROJECTS BY ENSURING

Going Beyond TA Loans and Consultants:Going Beyond TA Loans and Consultants:Three Examples of Sustainable Project Three Examples of Sustainable Project

Development ArrangementsDevelopment Arrangements

FIRE (Financial Institutions Reform and Expansion FIRE (Financial Institutions Reform and Expansion Project), USAID IndiaProject), USAID India

Institutional ReformsInstitutional ReformsProject DevelopmentProject Development

Water and Sanitation Program, IndiaWater and Sanitation Program, IndiaState level ReformsState level ReformsULB capacity buildingULB capacity building

ILFS Infrastructure Development CorporationILFS Infrastructure Development CorporationProject Development and Promotion Partnerships (PDPPS) with Project Development and Promotion Partnerships (PDPPS) with State and Central GovernmentsState and Central Governments

Mitigating Risks through Capacity Mitigating Risks through Capacity BuildingBuilding

Permanent Secretariat for PPPPermanent Secretariat for PPPGoal

To create a permanent professional body to provide continuous and competent guidance to the PPP process and various stakeholders

Interventions by Multilaterals and other Donors

Help create an institutional arrangement that, as per terms of reference provided by government, will undertake the following activities -

(1) PPP Framework: establish and continuously update a body of guidelines, policies and processes for decision making, procurement and related issues for PPP projects

(2) Legislative Framework: assist in the creation of Legislative Frameworks to guide political and bureaucratic decision making for PPP

(3) Training: provide training to government functionaries to improve understanding of optimum risk allocation and of credible PPP structures

(4) Project Development: Project Structuring & Risk Management

THANK YOUTHANK YOU