Attracting investors to African public-private partnerships: a project preparation guide

126 Pages·2009·1.52 MB·English

by  World Bank

Attracting Investors to
African Public-Private
Partnerships
A PROJECT PREPARATION GUIDE
Attracting Investors to
African Public-Private
Partnerships
A Project Preparation Guide

Attracting Investors to
African Public-Private
Partnerships
A Project Preparation Guide
© 2009 The International Bank for Reconstruction and Development / The World Bank
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Washington DC 20433
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This volume is a product of the staff of the International Bank for Reconstruction and Develop-
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ISBN 978-0-8213-7730-7
eISBN: 978-0-8213-7731-4
DOI: 10.1596/978-0-8213-7730-7
Library of Congress Cataloging-in-Publication Data
Attracting investors to African public-private partnerships : a project preparation guide.
p. cm.
“This guide was commissioned by the Infrastructure Consortium for Africa (ICA) and funded
by a grant from the Public-Private Infrastructure Advisory Facility (PPIAF)."
Includes bibliographical references and index.
ISBN 978-0-8213-7730-7 — ISBN 978-0-8213-7731-4 (electronic)
1. Public works—Africa—Finance. 2. Infrastructure (Economics)—Africa. 3. Public-private
sector cooperation—Africa. 4. Investments, Foreign—Africa. I. Infrastructure Consortium for
Africa. II. Public-Private Infrastructure Advisory Facility. III. World Bank.
HD4338.A77 2008
658.15'224—dc22
2008037292
Cover: Naylor Design, Inc.
CONTENTS
ABOUT THE AUTHORS ix
ABBREVIATIONS xi
1. INTRODUCTION 1
Role of Public-Private Partnerships 2
Scope of the Guide 3
Limits to the Guide 5
2. DEFINING PUBLIC-PRIVATE PARTNERSHIPS 7
Privatization and Management Contracts 7
Types of Public-Private Partnerships 8
3. SETTING THE FRAMEWORK 13
Policy Rationale 13
Legal Framework 14
Investment Framework 16
Operating Framework 16
Summary 18
v
4. SELECTING PROJECTS 19
Project Scope and Requirements 20
Expressing Projects in Terms of Outputs 21
Can the Project Be Delivered as a Public-Private Partnership? 23
Value for Money 28
Initial Market Assessment 29
Lessons from Private Sector Engagement in Projects in Africa 30
5. PREPARING PROJECTS FOR MARKET 35
Management of the Process 36
Funding for Project Preparation 41
Unsolicited Proposals 42
Project Assessment 43
6. PROJECT ADVISERS 47
Role of Advisers 47
When to Use Advisers 47
Appointment of Advisers 50
Role of Public-Private Partnership Units 50
Management of Advisers 50
7. MANAGING THE INTERFACE WITH THE PRIVATE SECTOR 53
Preparation for Market Sounding 54
Before the Launch 55
Perception of the Project 57
Role of Development Finance Institutions, Regional 57
Investors, and Donors
Transition to the Procurement Phase 59
8. MANAGING PROCUREMENT 63
Outcome of the Procurement Phase 63
Role of Advisers 64
vi Contents
Role of Development Finance Institutions 64
Bid Stages 64
Project Launch 66
Prequalification 69
Request for Proposals 71
Preferred Bidder and Financial Close 74
9. AFTER SIGNING 75
APPENDIXES
A. World Bank/PPIAF Private Participation in Infrastructure 81
Project Database
B. Sample Extract of a Risk Management Register for 85
Managing the Public-Private Partnership Project Process
C. Public-Private Partnership Web Sites 87
D. Profiles of Five African Public-Private Partnership Projects 91
Songas Processing Plant in Tanzania 92
Maputo Port in Mozambique 94
Skikda Desalination Plant in Algeria 96
Lesotho National Referral Hospital 98
Water and Electricity Services Provision in Gabon 100
REFERENCES 103
INDEX 105
BOXES
5.1 Common Problems in Project Governance 40
5.2 Common Mistakes in Project Preparation 41
7.1 Top 10 Tips for a Successful Market-Sounding Exercise 56
7.2 Major Concerns of Contractors and Investors 58
7.3 Major Concerns of Project Lenders 59
8.1 Project Information Memorandum 67
8.2 Bidders’ Conference 68
Contents vii
8.3 Summary of a Model Request for Qualification for 70
Public-Private Partnership Projects, Government of India
9.1 Tips on Contract Management 77
FIGURES
1.1 Number and Value of Private Participation in 2
Infrastructure Projects, by Region, 1996–2006
1.2 Key Phases of the Public-Private Partnership Project Process 4
4.1 Stages of Project Selection 20
4.2 Elements of a Risk Management Plan 26
4.3 Typical Contractual Structure of a Public-Private Partnership 28
4.4 Number of Private Participation in Infrastructure Projects 31
in Africa, by Sector and Type of Contract, 1996–2006
4.5 Number of Transport Projects in Sub-Saharan Africa in 33
World Bank PPI Database, by Sector, 1996–2007
5.1 Project Preparation Process 37
5.2 Outline of a Structure of Project Governance 38
8.1 Outline of the Procurement Process 65
8.2 Outline of the Prequalification Phase 69
8.3 Outline of the Request-for-Proposals and Financial 72
Close Phases
9.1 Structure of Contract Management 78
TABLES
4.1 An Example of Output Specifications for an Accommodation 22
Public-Private Partnership
6.1 Role of External Advisers 48
7.1. Checklist before Launching the Procurement Phase 60
viii Contents
ABOUT THE AUTHORS
This guide was prepared by the ICA Secretariat with the assistance of Partner-
ships UK (PUK), a public-private partnership (PPP) established by the British
government as a permanent center of excellence in the development and imple-
mentation of PPPs (for more information see www.partnershipsuk.org.uk).
It was commissioned by the Infrastructure Consortium for Africa (ICA; for
more information see www.icafrica.org) and funded by a grant from the
Public-Private Infrastructure Advisory Facility (PPIAF), a multidonor techni-
cal assistance facility that helps developing countries to improve the quality of
their infrastructure through private sector involvement (for more information
see www.ppiaf.org).
ix