Public-private partnership (PPP) leverages private funding and innovation to efficiently complete large-scale government projects on time and within budget. At the time when India is witnessing a massive boost in its infrastructural growth, such projects are always welcome news. A division of the World Bank group, IFC and NaBFID have partnered to collaborate on identifying and developing public-private partnership projects to strengthen India’s infrastructure sector.
This collaboration, marked by the signing of a memorandum of understanding (MoU) on Friday, aligns with the government’s goal of achieving a $5 trillion economy while promoting sustainable and climate-resilient growth.
Under the MoU between IFC and NaBFID (National Bank for Financing Infrastructure and Development), both organizations will work together to identify and develop PPP projects, along with providing comprehensive transaction advisory services. The selected projects will prioritize sustainability, climate adaptation, and mitigation, in line with India’s climate commitments.
IFC and NaBFID expect that these initial projects will attract approximately $2 billion in private investment over the next few years. The focus will be on national priority sectors, including renewable energy, energy storage, and urban infrastructure.
These projects will serve as models for replication and scalability and will play a crucial role in mobilizing private funds to meet India’s substantial infrastructure investment requirements.
According to the National Infrastructure Pipeline (NIP), India’s infrastructure needs are estimated at around $1.4 trillion, with $290 billion to be sourced from the private sector.
Vivek Joshi, the Secretary of Financial Services for the Government of India, praised the cooperation between NaBFID and IFC, emphasizing how it aligns with the government’s NIP initiative. He acknowledged the government’s efforts to facilitate the development of PPP projects by providing support for project implementation and viability gap funding.
Joshi welcomed the support of stakeholders in strengthening India’s infrastructure sector, which plays a crucial role in the country’s economic growth.
NaBFID and IFC will work together with state governments and project implementation agencies, in collaboration with the Department of Economic Affairs, to identify and assess PPP projects that require transaction advisory support.
The main objective is to improve people’s access to essential services such as energy, transportation, and sanitation by attracting commercial financing on competitive terms. The partnership will leverage government financial assistance and seek financing and risk products from multilateral agencies as needed.
Emmanuel B. Nyirinkindi, the Vice President of Cross-Cutting Solutions at IFC, expressed enthusiasm for the collaboration with NaBFID and the Indian government, emphasizing its importance in developing sustainable, viable, and scalable PPP projects that promote the mobilization of private capital.
An agreement was formally signed in the presence of several officials, including Rajkiran Rai G, the Managing Director of NaBFID, and Thomas Lubeck, the Manager of Asia Pacific Public-Private Partnership Transaction Advisory Services at IFC. Representatives from the Department of Financial Services, Ministry of Finance, as well as other key individuals from IFC and NaBFID, were also in attendance.
Rajkiran Rai G, the Managing Director of NaBFID, emphasized the significance of bridging both financial and non-financial gaps to effectively implement the National Infrastructure Pipeline (NIP) and drive India’s infrastructure sector forward.
Providing Transaction Advisory Services, particularly for Public-Private Partnership (PPP) projects, is one way to address these non-financial gaps. These services aim to encourage the investment of public and private capital for development purposes, while assisting clients in structuring and procuring viable projects.
IFC and NaBFID have partnered to collaborate on identifying and developing public-private partnership projects.
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As an advisor, IFC will support the government in conducting comprehensive project studies, evaluating various structuring options that best meet public needs and attract investors, and facilitating open and competitive tenders to identify qualified private partners and promote innovation in project delivery.
IFC’s advisory support will continue until project agreements are signed between the public and private entities.
IFC has an impressive track record of over 30 years in advising on PPPs across a wide range of sectors in more than 100 countries. Through 164 projects, IFC has successfully mobilized $40 billion in private investment, positively impacting the lives of over 153 million individuals by providing them with improved access to various services and opportunities.
Source: IFC Press Release