Conflict-scarred Timor-Leste turns to public-private partnerships to get its infrastructure up and running for economic growth.
Torched or torn down in the violence that occurred after the vote for independence in 1999, about two-thirds of Timor-Leste’s infrastructure lay in rubble. But as a fast-growing economy, it must be able to rely on strong infrastructure to sustain its development. For Timor-Leste, it’s about building a better future: new or upgraded airports, wharfs, telecommunications networks, hospitals, and other facilities critical to economic growth.
Unlike other post-conflict economies, Timor-Leste has an advantage: $10 billion in sustainably managed funds from oil revenues. To get its infrastructure projects off the ground, the government is looking to tap the private sector’s expertise in managing, financing, and maintaining such projects – an area that IFC knows well.
Last May, the government gave IFC the green light to arrange private investor participation in two projects essential to the country’s trade and transport sectors: an upgrade of its airport and the construction of a new port near the capital Dili.
“It’s exciting because these are IFC’s first public-private partnership mandates in Timor-Leste,” said Milissa Day, IFC’s Resident Representative. “By building a strong case and sharing knowledge, we were able to show the government how it can forge more dynamic partnerships with the private sector to build much-needed new infrastructure.”
The mandates come a year after the government asked IFC and the Asian Development Bank for advice on increasing private sector participation in 22 potential infrastructure projects, ranging from roads, power plants, and health and communications facilities. IFC and the Asian Development Bank developed a practical framework for the government to screen, assess, and develop public-private partnerships.
Infrastructure is a core pillar of the Timor-Leste government’s current strategic development plan. For the port and airport projects, IFC will play a key role in structuring the agreements and finding private investors. New airport terminal facilities will cater for an additional 250,000 passengers per year, promoting tourism by making it easier to fly in and out of the country. The new port in Tibar Bay, 10 kilometers west of Dili, will increase cargo capacity and help ease congestion in the country’s only operational port, stimulating more economic activities by improving the movement of goods for exporters and importers. Cargo volumes in Timor-Leste are projected to grow at 15 to 20 percent over the next few years. The projects are expected to be in place by 2015.
For more information on IFC in Timor-Leste, contact our communications officer, Sara King, at email@example.com.