World Bank Supporting Infrastructure Development in Bangladesh through Public-Private Partnerships

Supporting Infrastructure Development in Bangladesh through Public-Private Partnerships

The World Bank supported Investment Promotion and Financing Facility (IPFF) Project promotes private sector participation in infrastructure development by supplementing long term financing resources beyond the capacity of local financial institutions. The project provides partial debt financing through the Bangladesh Bank to participating financial institutions (PFIs). The aim is to attract private sector entrepreneurs for infrastructure projects developed through public-private partnerships (PPP).

During the current phase, the IPFF has provided financing for a 55 MW power plant at Nawabgonj, an inland container depot at Chittagong and two water treatment plants. The future pipeline includes financing a fiber optic cable network expansion sub-project across the country, partial debt-financing for a 195 MW gas-fired power plant at Ashugonj, setting up a dry dock facility near Chittagong Port, and another 55 MW power-plant at Manikgonj. These are expected to commence during fiscal year 2015.

The project became effective in August 2006 with initial World Bank funding of $50 million and received additional financing of $257 million in September 2010. In the first phase, IPFF financed seven small power plants that added 178 MW to the national grid.

The project was recently restructured in February 2014 and the interest rate was revised. The revised interest rate, which is now lower than the existing market rate, has been a major factor in attracting private sector sponsors from different infrastructure sectors who have shown interest in IPFF facility loans.

The IPFF also supports the strengthening of the Government’s Public Private Partnership (PPP) Office and provides technical support for infrastructure project preparation. The PPP Office of the Government is actively working to develop a solid infrastructure pipeline for the medium and long-term. Under the TA component of the IPFF, two overseas training programs and a series of five PPP training workshops have been organized for PPP focal points from different ministries of Government to develop PPP capacity.

So far, the project has disbursed $129 million and has developed a robust pipeline of sub-projects in diverse sectors. The project is on track for meeting its objectives before it closes on December 2015. Source: World Bank statement