ADB urged to increase upstream engagements in PPPs

The Asian Development Bank needs to develop a strategic approach toward supporting public–private partnerships - with a focus on upstream engagements - to address the infrastructure investment gaps in its developing members, a new reprt says.

ADB’s Support to Public–Private Partnerships, 2009–2018 report assessed the development bank's effectiveness in supporting PPP activities and how best it can respond to the PPP demands in different country contexts and across key sectors. 

The lender approved $22.1 billion of PPP interventions during the review period, comprising $10.8 billion in public loans, $11.1 billion in private sector facilities, and $223 million in 126 technical assistance with significant PPP elements.

The evaluation report found that ADB’s support for PPPs has delivered positive developmental outcomes, mostly through targeted downstream investments. Its downstream activities, both in public and private projects, contributed to increased private sector participation in building public infrastructure. 

However, ADB’s upstream support for the long-term enabling environment for PPPs was not able to achieve the much-needed change to crowd in the private sector and was not well coordinated with downstream project development and financing activities.  

And according to the report - released by ADB’s Independent Evaluation Department - the lack of updated sector, regulatory, and policy frameworks, as well as limited institutional capacity and state-owned enterprise dominance, have slowed the pace of PPP investments among ADB’s developing members. Risk mitigation products addressing the needs of private project developers and institutional investors in ADB’s PPP projects are not sufficiently available.