ppp financing arrangments structuring finance successfully imtiaz hizkil islamic development bank l.
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PPP FINANCING ARRANGMENTS – STRUCTURING FINANCE SUCCESSFULLY IMTIAZ HIZKIL ISLAMIC DEVELOPMENT BANK. Arrangement of Financing – One of the most challenging part of developing a PPP Infrastructure Project.

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ppp financing arrangments structuring finance successfully imtiaz hizkil islamic development bank

PPP FINANCING ARRANGMENTS – STRUCTURING FINANCE SUCCESSFULLYIMTIAZ HIZKILISLAMIC DEVELOPMENT BANK

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Arrangement of Financing – One of the most challenging part of developing a PPP Infrastructure Project
  • Project has to be Bankable, needs adequate technical and financial resources for preparation
  • Minimize risks and allocate to the right party
  • Legal and Regulatory Environment
  • The need for a track record – the first PPP project is perhaps the most challenging project
attracting sufficient project financing
Attracting Sufficient Project Financing

The Strength of Partnership

    • Managerial
    • Equity
  • Project’s Bankability
  • Track Record for Projects in the Industry
  • Appetite of Foreign and Local lenders
funding structure need to response to project needs
Funding StructureNeed to Response to Project Needs
  • Optimum Debt Equity Ratio
  • Equity
    • Sponsors
    • Capital Market
  • Long Term Debt
    • IFIs - Debt, Political Risk Guarantee
    • ECAs
    • Foreign Banks
    • Local Banks
  • Long Term Facilities – Reflect Projects Cashflows
  • Pricing of Debt – Fixed, Variable, Hedging
international financing institutions
International Financing Institutions
  • Brings Credibility, Enhanced Environmental and social Assessment
  • Role of IFI’s –
    • Where there is a major development impact
    • Critical for Mega projects and “First” projects in terms of country, sector and technology.
  • Help bring other funds - Commercial sources, Equity

IFIs may participate through different windows

    • Direct Funding
    • Special purpose fund
    • Guarantees
role of islamic finance in ppp infrastructure projects
Role of Islamic Finance in PPP Infrastructure Projects
  • Modes of Financing
    • Installment Sale
    • Leasing
    • Istisnah
    • Equity
  • No fundamental limitation
  • Project Finance transactions have combined Islamic Financing and Conventional Financing – Issues have been Resolved
role of islamic development bank in ppp projects
Role of Islamic Development Bank in PPP Projects
  • Aggressively pursuing “Project Finance” Based Transactions
  • BOT Projects Guidelines Prepared
  • Workshops on BOT projects in Member Countries
  • Sukuk Resources Available to Fund PPP Projects in Infrastructure in Member Countries / MENA Countries
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Working Closely with IFIs, Commercial Banks and Local Banks in large and medium scale transactions
  • Intervention in Power, Oil, Gas, Transportation
  • Committed to participate in Projects in other areas of Economy
  • Fully Support Institutional Strengthening
  • Cooperation with multi-laterals, bilateral and other institutions
idb s participation in the first hydro electric ipp in pakistan
IDB’s Participation in the first hydro-electric IPP in Pakistan
  • IDB providing US$ 37.2 million of financing on leasing mode
  • Other participants - ADB and local commercial banks
  • A PPP in hydro-sector is challenging and a good example of sharing of risks by the parties
  • Success of this project will bring many other hydro power PPP type projects in the country