The Multilateral Investment Fund (MIF) Agenda for Building Capacity for Public-Private Partnerships and Improving Access to Basic Services

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1 2011/FMP/CON/004 Session 3 The Multilateral Investment Fund (MIF) Agenda for Building Capacity for Public-Private Partnerships and Improving Access to Basic Services Submitted by: Inter-American Development Bank Conference on the Framework and Options for Public and Private Financing of Infrastructure Washington, D.C., United States June 2011

2 The MIF Agenda for Building Capacity for Public-Private Private Partnerships and Improving Access to Basic Services

3 THE CHALLENGE WE FACE Over 40 million people do not have access to energy 125 million lack access to improved sanitation; 50 million lack access to safe water Businesses and people lack access to basic services like broadband connectivity or recycling

4 HOW DOES FOMIN OPERATE? FOCUS on 4 Access Areas Basic Services Finance Markets Skills and Capacity LEARNING Where knowledge developed from projects is an important as the project itself. COMMUNICATING As the linchpin of a wide network of partners, sharing best practices and lessons learned. CATALYZING Expanding and embedding successful project models to achieve systemic impacts

5 ACCESS TO BASIC SERVICES Increase Private Participation in the development of basic infrastructure across the region Disseminate PPP knowledge products to governments and the private sector Strengthen PPP capacity to provide basic infrastructure in transport, water and sanitation, energy and social sectorssuchashealthandeducation at all levels of government from cities to national authorities Pilot pro poor projects at the municipal level to expand the PPP concept and model dl

6 THE PROBLEM BEING ADDRESSED Insufficient capacity to effectively select, plan and carry out PPPs resulting in unintended fiscal consequences and frequent renegotiations Lack of support to new adapters to expand the PPP concept due to inadequate legal, regulatory and institutional environment for PPPs PPP knowledge not widely disseminated in the region

7 GOALS Contribute to increase private participation in the development of basic infrastructure across the region Expand access to, and improve quality of, basic services through PPPs at the local level particularly Pro Poor PPPs (or P5)

8 ACTIVITIES Training Strengthening PPP Institutions Advisory Services (under development) Support for legal and regulatory reform Knowledge Dissemination and Products

9 Results 16 capacity building projects in 6 countries. Over US$ 15 million in FOMIN funding mobilized. Country level workshops and advisory services 3 international conferences with over 400 participants from governments, the private sector and international organizations. More than 20 countries represented. Permanent platform of online and in person PPP training and capacity building (Teconologico de Monterrey) Global l PPP Source Book k( (under development with ihwbi and ADB) AsDB) PPP country level manuals Infrascope PPP Readiness Index and Report

10 INFRASCOPE Infrascope: PPP Readiness Index and Software Tool developed and published by the Economist Intelligence Unit in collaboration with FOMIN Assesses a country s readiness and capacity for public private partnerships in water, transportation t ti and electricity it Evaluates 19 countries in Latin America and the Caribbean, according to their relative performance in six key areas, using 19 indicators Platform for policy dialogue with countries as well as tool to measure impact performance of FOMIN capacity building projects Learning tool for governments and donors

11 INFRASCOPE PROJECT TIMELINE November 2008: FOMIN commissioned the EIU to evaluate the environment for Public Private Infrastructure Partnerships in Latin America and the Caribbean June 2009: A pilot Infrascope index was launched February 2010: FOMIN and the EIU organized a peer review workshop to review the Infrascope methodology in advance of the release of the second edition September 2010: FOMIN organized an online e conference to further review the Infrascope methodology and country information November 2010: FOMIN and the EIU November 2010: FOMIN and the EIU released the second edition of the Infrascope

12 INFRASCOPE Key Characteristics Sector specific focuses on water, transport and electricity projects Contract specific evaluates concession contracts and does not consider management and lease contracts or divestitures Country level assessments only considers regional tendencies where possible and relevant Considers both qualitative and quantitative factors Dynamic rather than prescriptive model

13 The Infrascope Development Process Data collection Research and analysis Construction, weighting, g, scoring of Index Activities Search relevant, publicly available data sources Interview country and sector experts, distribute survey Review laws and regulations Compile secondary reports and assessments Qualitative analysis of laws, regulations and institutions Data normalisation Compare index results against survey responses, interviews, World Economic Forum Index Sources World Economic Forum, PPIAF PPI data base, World Bank, Economist Intelligence Unit, Transparency International, Latinobarometro survey, Multilateral Investment Guarantee Agency data, Fitch/S&P/Moody s PPIAF sector reports, IADB reports, Economist Intelligence Unit publications (Country Commerce, Country Finance, Risk Briefing) Economist Intelligence Unit analysts and model builders

14 INFRASCOPE THEMATIC CATEGORIES Legal and regulatory framework Institutional framework Operational maturity Consistency and quality of PPP regulations Effective PPP selection and decision making Fairness/openness of bids, contract changes Dispute resolution mechanisms Quality of institutional design and roles Public capacity to plan and oversee PPPs PPP contract, hold-up and Methods and criteria for expropriation p risk awarding gprojects Regulators risk allocation record Investment climate Political distortion Business environment Political Will Financial facilites Government payment risk Capital market: private infrastructure finance Marketable debt Government support for low-income users Sub-national adjustment factor Experience in transport and water concessions Quality of transport and water concessions Project experiences and regulatory environment Economic and financial environment A sub national indicator was added to the 2010 addition and a political will indicator replaced social attitudes toward privatisation Sub-national adjustment

15 Infrascope Index weights Each category was scored and is weighted to produce the overall index score: Regulatory framework Institutional framework Investment climate 25% 20% 15% Operational maturity Financial facilities 15% 15% Sub-national adjustment factor 10%

16 INFRASCOPE More information is available on the web at Infrascope

17 David Bloomgarden Lead Private Sector Development Officer