Public–Private Partnership Monitor: Pakistan

By Asian Development Bank

The Government of Pakistan strongly supports public–private partnership (PPP) initiatives. From 1990 to 2019, Pakistan witnessed 108 financially closed PPP projects, with a total investment of approximately $28.4 billion. About 88% of these projects are in the energy sector, attracting more than $24.7billion, followed by investments in the port sector. In early 2021, Parliament approved the amendments to the 2017 PPP Law, enacting the Public Private Partnership Authority (Amendment) Act 2021. This further strengthens the enabling legal and regulatory framework for developing and implementing PPPs, thereby promoting private sector investment in public infrastructure and related services.

• Language: English
• Publisher: Asian Development Bank
• Release date: Jul 1, 2021
• ISBN: 9789292629410

Book preview

PUBLIC–PRIVATE PARTNERSHIP MONITOR

PAKISTAN

JULY 2021

Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO)

© 2021 Asian Development Bank

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Some rights reserved. Published in 2021.

Printed in the Philippines

ISBN 978-92-9262-940-3 (print); 978-92-9262-941-0 (electronic); 978-92-9262-942-7 (ebook)

Publication Stock No. SGP210251-2

DOI: http://dx.doi.org/10.22617/SGP210251-2

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Notes:

In this publication, $ refers to United States dollars.

ADB recognizes China as the People’s Republic of China, Korea as the Republic of Korea, and Vietnam as Viet Nam.

On the cover:

ADB is supporting the development and delivery of public–private partnership projects in Pakistan to aid in bridging the gap in the country’s infrastructure investments (photos by Sara Farid/ADB: wind turbines in Thatta District, woman farmer, wind power generation plant at the Foundation Wind Energy-I Limited, and construction site at the Head Balloki extension project in Punjab; Nasr ur Rahman/ADB: solar panels in Khushab District; and Syed Muhammad Rafiq/ADB: aerial view of Karachi).

Cover design by Claudette Rodrigo.

Contents

Tables, Figures, and Box

Foreword

We are pleased to present the Public–Private Partnership Monitor, a detailed review of the current state of public–private partnership (PPP) enabling environment in selected countries in Asia and the Pacific.

Availability of adequate infrastructure is a measure of a country’s ability to sustain its economic growth. For economies across Asia and the Pacific, provision of basic infrastructure services, including water, health, energy, transportation, and communications, is an important public sector activity. As demand for infrastructure has increased faster than government budgets, the public sector has increasingly considered partnership with the private sector as an alternate modality for financing infrastructure.

The Asian Development Bank (ADB) estimates that Asia and the Pacific must spend $1.7 trillion a year on infrastructure until 2030 to maintain growth, meet social needs, and respond to the effects of climate change. That amount is expected to go up. The traditional sources of finance for infrastructure—the government’s budgetary allocations—have not been enough to meet the demand. Prior to the coronavirus disease (COVID-19) pandemic, ADB estimated an annual infrastructure gap of $204 billion to be filled through private sector investment. That amount is also now expected to increase.

For the private sector, investment in infrastructure, whether through PPPs or otherwise, represents an investment avenue competing with various other investment options available. In order to compete, and to crowd in private capital into infrastructure, governments need to provide a conducive environment to adequately establish and protect the rights of the private sector, and the necessary support to ensure every asset brought to market provides returns that are commensurate with the risks.

The PPP Monitor provides the investor community with business intelligence on the enabling environment, policies, priority sectors, and deals to facilitate informed investment decisions. For ADB developing member countries (DMCs), the PPP Monitor serves as a diagnostic tool to identify gaps in their legal, regulatory, and institutional framework. ADB and other international development agencies can also benefit from the PPP Monitor as it could be useful in initiating dialogues to assess a country’s readiness to tap PPPs as a means to develop and sustain its infrastructure.

Building on the success of the previous editions of the PPP Monitor, the new PPP Monitor is now being brought online to widen its reach. More countries will be continually added in the PPP Monitor and it is expected to become a primary knowledge base for assessing a country’s PPP environment for the government and the business community. The PPP Monitor features an interactive online version which allows users to compare and contrast the key PPP parameters and features across the DMCs. The online version of the PPP Monitor may be accessed at http://www.pppmonitor.adb.org.

The PPP Monitor has been upgraded to provide a ‘one-stop’ information source, derived from a consolidation of (i) the previous PPP Monitor; (ii) leading PPP databases of multilateral development banks like the World Bank and the IFC and organizations like EIU (Infrascope), and GI Hub (InfraCompass); (iii) reports of a country’s PPP unit; (iv) a country’s legal framework; and (v) consultations with leading technical experts and legal firms as well as financial institutions.

The PPP Monitor includes more than 500 qualitative and quantitative indicators to profile the national PPP environment, the sector-specific PPP landscape (for eight identified infrastructure sectors), and the PPP landscape for local government projects. The COVID-19 pandemic has pushed social infrastructure into the forefront of policy and planning; hence, where possible, this PPP Monitor takes a bigger focus on social and municipal aspects like health, education, and affordable housing.

The PPP market in most of ADB DMCs is still at an emerging/developing stage, and continuous regulatory reforms and institutional strengthening are required to facilitate further private sector investment in infrastructure and to create a sustainable pipeline of bankable projects. Through the PPP Monitor, ADB continues to provide support for DMCs in addressing various infrastructure and PPP-related challenges, in developing sustainable infrastructure projects, and in delivering efficient and effective public services through PPPs. ADB also helps DMCs improve their investment climates, formulate sound market regulations, and build robust legal and institutional