Business News of 2014-08-27

World Bank promises support for PPP initiative

The World Bank has pledged to support the government's public-private partnership (PPP) initiative, with the financial muscle needed to make the policy a reality.
The bank's Country Director for Ghana, Liberia and Sierra Leone, Mr Yusufa Crookes, said the bank was impressed with the fact that Ghana could easily leverage private capital through the PPPs, which could be used to bridge the country's yawning infrastructure deficit.
The monetary value of the deficit is currently estimated at US$7.5 billion over the next five years, and would require an annual investment of US$1.5 billion to be bridged.
Given that budgetary allocations cannot meet that amount, Mr Crookes said PPPs came in handy hence the bank's decision to give the initiative its financial backing.
“Where you have a (PPP) process completed, a defined private sector investor identified and selected, they may need financing. We are standing ready, through the World Bank Group, to provide whatever financial products those investors might need to realise their ability to partner government in developing any specific infrastructure they may have been selected for,” he said at a PPP conference in Accra.
C-NERGY Ghana
The conference was organised by C-NERGY Ghana, the local subsidiary of investment advisory firm, C-NERGY Global, in partnership with the Ministry of Finance and Economic Planning.
Speakers at the four-day event included the Director of Public and Private Infrastructure Management Centre (PIMAC) of Korea, Dr Kangsoo Kim; the Head of PPP Network at the Southern Africa Development Corporation (SADC), Mr Kogan Pillay; Mr Marcel Van Den Broek of Vandeneroek Consulting and Dr Alexander Budzier of Oxford University.
The event created the platform for local and foreign investors from different parts of the world, including insurance companies, pension fund managers and government agencies, to interact and share their ideas and experiences on developing and financing bankable PPP projects to bridge the country's infrastructure gap.
A Director of C-NERGY Global Holdings, Mr Michael Cobblah, said the company was prepared to offer the technical expertise needed to ensure a smooth execution of PPP projects in the country.
Legal framework
President John Mahama, who was represented by the Minister responsible for PPP, Mr Rashid Pelpuo, assured the participants that the government was in the process of providing the legal framework that would enable the private sector to partner public institutions in the provision of public infrastructure.
He also said consultations with stakeholders had taken place on the draft PPP legislation which would be laid before Parliament soon.
"In the context of our win-win partnerships, investors must receive a fair return for their risk capital and in return, we expect know-how and technology transfer and a commitment to local employment," Mr Pelpuo said at the event.
Participants’ reaction
The Leader of Strategy and Business Development of the Beige Group, Mr Peter Nii Odoi Charway, who participated in the conference, commended the organisers for bringing together seasoned brains in PPP to deliberate on how Ghana could maximise returns from the policy.
On the World Bank’s support for the initiative, he said it was one of the sources of funding needed to make PPP a success.
"The question now is, how well are we able to package these projects and make them attractive to financial institutions to say ‘yes we are going to fund you’? These are some of the capacity-building areas that the government will have to look at," he said.
"The private sector in Ghana only started developing in the last 10 years but we are looking at huge contracts as in US$50million and over. What is the government doing to support the private sector? Can the public sector managing the process come to the private sector to ensure that the back and forth in the process is avoided?"
Source: graphic.com
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