Annual Report 2015

PIDG FACILITIES

 

DevCo The Infrastructure Development Collaboration Partnership Fund

Providing transaction advisory services to governments on public-private partnerships (PPPs) and bringing bankable, transparent and competitively-tendered PPP projects to the market

 

DevCo is managed by the World Bank Group’s International Finance Corporation (IFC)

Projects that reached Financial Close in 2015

Niger Niger Dry Port

Philippines Metro Clark Bulk Water Project

Bhutan Thimphu Parking PPP

Projects that reached Commercial Close in 2015

Rwanda Kigali Bulk Water Supply Project

Uganda Kampala Waste Management PPP

Guinea Guinea Power PPP

Myanmar Myingyan IPP

Achievements in 2015

Three ground-breaking PPP projects reached financial close in 2015.

The Niger Dry Port will increase efficiency of trade in Niger. The transaction mobilised $77m in private investment and the Government of Niger will receive fees of over $48m during the concession lifespan.

In the Philippines, the Clark Water project saw water and wastewater tariffs lowered by 1Php/m3 ($0.02/m3) vs current tariffs. The project will generate $115m in capital investment over the remainder of the concession.

In Bhutan, the Thimphu Parking project was the first urban infrastructure PPP to be closed in the country. Having mobilised $9.6m in private investment, the project has improved traffic conditions, facilitating the development of vital mass public transportation. Thimphu Parking has potential for replication elsewhere in the country.

 

Other notable highlights

During 2015, seven new PPP mandates were signed. The new originations demonstrate DevCo's commitment to working across sectors and in difficult frontier markets: 71% were in DAC I / II countries and 43% were in fragile countries. In Zambia, for example, DevCo will support IFC to structure two competitively tendered private partnership transactions for two 50MW solar photovoltaic plants; while in Senegal, it will support the structuring and implementing of a pilot PPP for a bus rapid transport system in Dakar.

In Rwanda, the Kigali Bulk Water concession between the Government of Rwanda and Metito will meet 40% of the city’s water needs over the next 27 years, generating over $75m in private sector investment. EAIF is also involved in progressing the financing of the project.

DevCo supported Uganda’s Kampala Capital City Authority, to conclude a concession for solid waste collection that will serve 800,000 people. The project is the first of its kind in Uganda and has potential for replication in Zambia.

In Myanmar, DevCo supported IFCs structuring of the first competitive tender in the country’s history – to select an independent power producer to build a 225MW combined cycle power plant in the Myingyan region.

 

2016 and beyond

From 2016-2020, DevCo will expand its work in frontier markets; specifically increasing its work in fragile and conflict affected countries. It will continue to bring innovation to its transactions, pursuing pioneering deals with the potential to transform an entire sector of a country’s economy and deals which pave the way for future private sector investment opportunities. DevCo will also empower economic growth by supporting PPP transactions that remove critical obstacles to infrastructure development. Finally, DevCo will work closely with TAF to progress a joint scale up initiative.

Niger Niger Dry Port

DevCo supported IFC to develop the Niger Dry Port Project to improve efficiency of trade in Niger

Context

Niger is a landlocked country which is entirely reliant upon the infrastructure and maritime access of neighbouring countries for its imports and exports. The time-consuming sorting and processing of merchandise from Niger takes place in the congested sea ports of Cotonou (Benin), Lome (Togo), Tema (Ghana) and Abidjan (Côte d’Ivoire). Transport costs are prohibitively high; presenting a major obstacle to Niger’s development. The Government of Niger (GoN) are keen to pursue the development of dry port facilities and transport infrastructure to improve Niger’s access to affordable trade.

 

 

Project

The IFC was engaged as the lead transaction advisor to the GoN and, with DevCo’s support, was instrumental in structuring and implementing the Niger Dry Port Project, a two-site facility in Dosso (corridor of Benin) and Niamey Rive Droite (corridors of Togo, Ghana and Côte d’Ivoire). The Niger Dry Port will be multi-modal with a connection to a new railway project linking the Port of Cotonou (Benin) and Niger. When completed, Dosso dry port platform will be the largest multi-modal cargo handling centre for imports from Benin.

IFC and DevCo worked to attract the private sector to the development and operation of the greenfield Dosso site and existing Niamey Rive Droite platform. As the first of its kind in Niger, the Niger Dry Port Project required extensive legal and technical support to structure an attractive, bankable deal with appropriate regulatory frameworks in place to ensure its success. Following IFC recommendations, the GoN created a Dry Port Authority in 2014 with responsibility for conceding and monitoring the concession.

Having established a transparent and competitive bidding process, IFC and DevCo were involved in helping to select a private operator, Bolloré Africa Logistics (BAL), to build, develop and operate both dry ports. BAL won a 20-year concession, investing $77m and guaranteeing fees to the GoN of $48m over the concession lifespan.

 

Impact

By moving essential sorting and processing of goods inland, the Niger Dry Port will reduce congestion at the regions’ seaports. Inland processing will provide employment opportunities in Niger and will add value further up the supply chain. The Niger Dry Port will provide faster, more affordable links with coastal ports, facilitating efficient international trade while investment in transportation assets will enable Niger to accelerate the flow of cargo from ships to inland destinations. With improved access to trade within West Africa and internationally, the project has the potential to position Niger as an important trade hub.

Rwanda IFC and DevCo develop a PPP transaction to provide sustainable water for Kigali

Rwanda’s capital, Kigali, has a population of over one million and is growing rapidly; placing considerable strain on the city’s water infrastructure. Kigali customers experience intermittent supply due to limited water production capacity. The Government of Rwanda sought to develop a new water supply project through a PPP; retaining the IFC and DevCo to advise on the preparation, design and implementation of private sector participation in the project. The Metito Consortium won a 27-year concession to build, operate and maintain a 40,000m³/day bulk water scheme which will account for 40% of Kigali’s potable water supply. This significant transaction is the first competitively tendered Water Build Operate Transfer Concession in sub-Saharan Africa (outside of South Africa), and Metito’s $75m is among the largest recent private sector investments made in the sub-Saharan water sector.

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