IFC has been key in structuring public-private partnership transactions in infrastructure and other public services projects worldwide that contribute to sustainable economic development and growth.
Public-private partnerships are contractual arrangements that allow governments to benefit from private sector expertise, management, and finance, helping expand access to public services such as water and sanitation, transport, power, and education. In the Middle East and North Africa, IFC is actively involved in structuring deals to bridge gaps in these key sectors.
Improving Water Supply
In Egypt, we signed a mandate with the government in late 2006 to implement a concession for a potable treatment plant that will provide safe water and sanitation in New Cairo. The city is being developed to ease overcrowding and the burden on infrastructure in greater Cairo and is projected to grow from 350,000 residents to 2 million by 2020. The project is part of the government's plan to expand infrastructure through several model public-private partnerships, while building a legal, regulatory, and economic environment conducive to sustainable private sector participation in public services. We are also working with the government to implement a concession for a wastewater treatment plant to serve the new city and its adjoining areas.
In Morocco, IFC helped privatize an irrigation project in the citrus-growing area of Guerdane. Following a highly competitive and transparent bidding process, a consortium led by Omnium Nord-Africain was selected. The consortium agreed to a 30-year concession for the construction, cofinancing, and management of an irrigation network for channeling water from a nearby dam complex to some 600 citrus farmers. This was the first public-private partnership in irrigation in the world, and it created Morocco's first domestic private infrastructure operator.
In Saudi Arabia, IFC advised the General Authority of Civil Aviation on structuring a public-private partnership to develop a desalination plant for the King Abdulaziz International Airport in Jeddah and its associated facilities. The project will upgrade outdated systems and supply an initial 30,000 cubic meters of potable water a day. This will save the authority about $12 million a year through technical, operational, and managerial efficiencies.
Expanding International Airports
IFC has committed about $1 billion in investments worldwide in transportation infrastructure projects. In Jordan, we worked with the government to help restructure and award a 25-year concession of the Queen Alia International Airport in Amman. Our mandate ended successfully in a record 13 months. At the World Economic Forum in April 2007, the government of Jordan signed an agreement with Aéroports de Paris Consortium to expand and rehabilitate the airport. The government had engaged us to help develop a plan that will increase the terminal's capacity, help it become a regional hub, increase service-quality standards to align with international best practices, and ensure revenue flow for the government.
Benefits for Jordan
- The transaction is the largest private sector investment in Jordan to date
- About $1 billion of private investment to be mobilized in the country’s airport sector
- Government savings of about $28 million a year in subsidies
- Bridging of a critical gap in infrastructure
- Tourism promotion
- More than 23,000 jobs over the life of the project
- Model transaction for other public-private partnerships
|
In Saudi Arabia, we helped structure key upgrades at the King Abdulaziz International Airport. Established in 1981, the Hajj terminal could not keep up with the demands of the increasing number of pilgrims visiting Mecca each year. Under the agreement, the investor will upgrade the facilities and improve services, helping reduce processing and wait times for travelers. The project will mobilize $250 million in private investments and result in significant subsidy savings.
Promoting Sustainable Energy
In Pakistan, IFC is advising the government on several projects, including privatizations of the Faisalabad Electric Supply Company. FESCO, which provides services to the central Punjab region, is one of the electricity distribution companies created from the unbundling of the power wing of the Pakistan Water and Power Development Authority. The government sees this transaction as a model for the eventual privatization of other distribution companies.
IFC also conducted a feasibility study for the government to help develop the country’s first wind-power generation project. The proposed project involves a concession to build, operate, and maintain a 50 megawatt plant in the southern province of Sindh that will promote renewable energy use.
In Lebanon, IFC and the government recently signed a mandate to introduce private sector participation in the power generation sector. The objective is to improve electricity supply and reduce governmental subsidies and production costs.
Supporting Private Education
IFC is increasingly working with governments to bring private sector solutions to educational challenges. Our work on a model project in Egypt to build and manage 300 new school facilities will address the country’s shortage of primary and secondary schools. It will also enhance the cost-effectiveness and quality of school infrastructure. This builds on our experience in successful private sector education projects in Ghana and Kenya.
IFC’s Role in Public-Private Partnership Transactions |
Among other functions, we:
- Advise governments on private sector participation in the delivery of public services
- Advise on policy and regulatory issues
- Help restructure state-owned enterprises
- Design transactions to attract private sector know-how and investments, ensuring long-lasting social benefits and sustainability
- Share global experience and best practices
- Understand investors’ needs and help balance public concerns with conditions necessary to attract private investment
- Promote good corporate governance principles and high environmental and social standards
IFC ensures that:
- Governments’ interests are safeguarded
- Bidding processes are efficient and transparent
- Tariffs are set at rates that are acceptable to end-users while ensuring financial sustainability and the elimination of subsidies over the medium term
- Transaction sustainability is supported through clear regulatory arrangements and contracts
|
IFC Advisory Services in the Middle East and North Africa – PEP-MENA – has developed a new and systematic approach to structuring public-private partnerships in the region. In Egypt and Pakistan, we are supporting dedicated government units that help coordinate, implement, and oversee these projects.
For more information contact:
Riham Mustafa
Communications Officer
Cairo, Egypt
Phone: +202 2 461 9150 ext. 306
E-mail: rmustafa@ifc.org | Egidio Germanetti
Communications Officer
Cairo, Egypt
Phone: +202 24619150 ext. 314
E-mail: egermanetti@ifc.org |
