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Procurement arrangements applicable to PPP contracts financed under World Bank projects Summary of guidance note OPCPR Mar. 2010
How is WBG associated with PPPs • IFC and IBRD provide advisory services to clients • IFC also participates by lending directly to the private sector investors • IBRD and IDA finance Output–Based Aid (OBA) subsidies, investments that are sovereign-guaranteed and consultants hired as transaction advisors • MIGA provides guarantees to government agencies Role of WBG in PPPs Advisory Services Investment lending Guarantees Direct Through hired consultants Non-sovereign guaranteed lending Sovereign guaranteed lending Equity Assets (Equipment/ Land) VGF/ Subsidies Loans to Financial Intermediary Guarantees IFC WB
Relevant provisions in GL Bank Procurement GL
Management & Lease contracts • Ownership of the assets continues with the public sector • Bank may be requested to finance a Management contract or the expansions and/or rehabilitation of the facilities • Under Bank GL similar to procurement of services and/or works • Should follow the Consultants Guidelines for Management contract and Section II of Bank procurement guidelines for expansion or rehabilitation
Concessions • Ownership of the assets is mixed for a period and is transferred to the public sector at the end of the contract, and investments are required and were part of the award of the concession • Bank may be requested to finance (or co-finance) e.g a BOT type contract, as part of the award of the concession (Bank GL para 3.13)
Greenfield Projects • Ownership of the new assets rests with the private sector and is transferred to the public sector at the end of the contract • Selection of the private partner is part of the award of the Greenfield project • Bank may be requested to finance (or co-finance) a BOT type contract, as part of the award of the concession(Bank GL para 3.13)
Divestitures • Private entity buys an equity stake in a state-owned asset or enterprise through an asset sale • Bank may be requested to finance government investments or new installations and expansions under responsibility of the private concessionaire • Bank GL para 3.13 – applicable if investments (either by the government or by the concessionaire) are part of the procurement process for divestiture • If investments are made some time after divestiture took place and an incumbent concessionaire is already in place, there are two possibilities: • Large investments on new facilities (like a ‘Greenfield’ project) - procurement of services and/or works • Expansion of existing network or system made by the incumbent concessionaire (not a ‘Greenfield’ project) – para 3.13 of GL