The Government of Bangladesh has adopted the policy of implementing infrastructure projects through involvement of the private sector. However, with the exception of some success in the power, gas and telecom sectors, private infrastructure development has been quite slow in the country. The insufficient provision of infrastructure facilities has seriously affected the growth and competitiveness of the economy. This has prompted the Government to take new initiatives to promote private sector participation in infrastructure development. As a part of this new initiative, the Government has undertaken a project called the Private Sector Infrastructure Development Project (PSIDP).
The PSIDP project has two components: project financing and transaction development. The financing component is being implemented through a $ 225 million fund lent to the Infrastructure Development Company Ltd., which arranges financing of private infrastructure projects. Under the second component of transaction development, a special unit called the Infrastructure Investment Facilitation Centre (IIFC) was created with the long-term objective of establishing an efficient public-private interface as well as for the purpose of developing the front-end stages of private sector infrastructure investment projects.
In addition to project development, IIFC assists the Government in establishing the private sector policy and regulatory frameworks. IIFC does not encroach on the technical and contracting functions of the public sector infrastructure agencies but supports their efforts by providing high-quality professional expertise where required. It has also a plan to develop a knowledge bank to sustain the private infrastructure efforts of the Government.
The paper focuses on the project development process followed by IIFC. It discusses the different steps followed in the overall process of project development and the role of IIFC at these stages. It also discusses the functions and characteristics of IIFC as an inside sponsor of private sector infrastructure projects and provides a list of activities undertaken so far. Finally, it draws conclusions based on the experience of IIFC since its inception in 2000.