1. atalysing private investment in infrastructure in the poorest developing countries for: - Economic growth - Better services for the poor International Private Sector Infrastructure Catalysing private investment in infrastructure in the poorest developing countries for: - Economic growth - Better services for the poor Gavin McGillivray Head Private Sector Department UK Department for International Development (DFID) 4 May 2011

2. Background In developing countries, especially the poorer ones; Hundreds of millions of poor people lack access to decent basic services – electricity, water & sanitation, communications and transport Inadequate infrastructure disadvantages private enterprise and puts a severe brake on economic growth Governments have nowhere near sufficient resources to extend and upgrade infrastructure to meet the needs of their burgeoning populations There are opportunities to catalyse private investment to help meet some of these needs

3. What prevents private investment in infrastructure? Outdated laws, regulations & policies Weak government capacity to understand and engage with private investors Lack of long-term lending, especially in local currency Paucity of well-structured projects to invest in and, to ensure that privately financed services reach the poor Need for clear targeting in design, and Well-conceived subsidies

4. Making infrastructure finance work for poor countries Project Preparation Enabling Environment Reaching The Poorest TAF Asia Africa Financing

5. PSI Structure Affiliated Programmes Private Infrastructure Development Group - PIDG Programme Management Unit (PMU) Other Trusts PIDG Trust PIDG Facilities TAF Asia Africa Other PSI Facilities

6. Public-Private Infrastructure Advisory Facility (PPIAF) PPIAF support has resulted in: the passing of over 51 laws and regulations the establishment of over 146 sector reform strategies the establishment or strengthening of over 74 institutions Example: Telecommunications, Afghanistan $468,800 in grant assistance to support the development of a regulatory framework Rapid rollout of competitive services, with tariffs falling 95% since 2002 The telecoms sector has attracted over $1.3 billion in private investment Electrical distribution network, Kabul

7. Results and Impacts Cotonou Port, Benin. DevCo Bugoye Hydropower Plant, Uganda. Emerging Africa Infrastructure Fund

8. Results and Impacts Ackruti City Slum Development, India GuarantCo Antara Cold Storage, Vietnam. InfraCo

9. PIDG Inputs and Outputs Total donor spend c.$500m 46 projects completed $9.4 billion of private investment committed 12 million already receiving new or better services Est. 30m people will receive new or better services from projects that have reached financial close 29 further projects under development, plus more in pipeline.

10. Distinctive Features of Approach 1.Capitalise on best ideas of group of like-minded agencies within flexible structure 2.Focus on sector-specific government and market failures that prevent private investment 3.Smart, catalytic use of donor capital to correct these failures – and help build financial markets that work for the poor 4.Use of professionally-managed, professionally-governed entrepreneurial facilities 5.Work within geographical and policy frameworks that focus energies on generating outputs that benefit the poor

11. Opportunities 1.Scale up existing programmes 2.Extend programmes to cover related areas, eg Climate-friendly infrastructure Agriculture / agribusiness related infrastructure 3.Adopt similar approaches in other sectors, eg Agriculture & agribusiness Tourism Education Health