Through the introduction of the PPP Budget in the 2009/10 budget session, Bangladesh strongly demonstrated its interest and commitment to the development of PPPs. This approach has generated much interest amongst the local and international investor community in the PPP programme in Bangladesh.
The PPP budget was structured to provide a technical assistance fund (PPPTAF) to support PPP project development activities, establish a viability gap financing fund for the provision of grant subsidy to enhance commercial viability of PPP projects with high socio-economic value, and establish a non-bank financial institution (BIFFL) to broaden the availability to long term finance in the local market.
The technical assistance fund has been used to pay for transaction advisors to carry out the feasibility studies. Although the VGF funds have not been utilized, the budgetary approval of the funds was essential to enable commitments and funding agreements to be provided to potential PPP projects. Agreement has already been reached for the provision of VGF to a Road project in the road sector (Dhaka elevated expressway project), and VGF commitment has been provided for the another expressway project (Upgrading of Dhaka Bypass to 4 Lane (Madanpur-Debogram-Bhulta-Joydebpur)).
The initial period of 2010-15 was critical in driving the systemic change management process required for introducing a new approach to delivering infrastructure projects in Bangladesh. It was a critical period where new institutions, frameworks, processes and systems were being developed, international benchmarked and implemented. At the same time parallel activities of project development with supporting capacity development events has enabled a large pipeline of PPP projects to be initiated and processed.
The results of the activities over this period are in line with the strategic objectives of implementing an institutional framework for a programme of PPP projects. A good foundation has been created over the 2010 to 2015 period which has now been taken further forward by the activities carried out over the 2015-16 period as set out in this report.