Over the years, there has been increasing interest in PPPs in Asia (see Exhibit 8) owing to strong economic development, population growth, and increasing urbanization. Due to the limited capacity of regional governments (constraints on their balance sheets and fiscal spaces) to finance the strong demand for infrastructure investment, governments have been committed to engaging more private players to finance these projects.
In 2015, four of the top 10 deals (by investment deal value) identified by World Bank were in Southeast Asia. While Malaysia was home to the biggest Southeast Asian deal (3B Jimah East coal-fired Power Plant project) worth about $2.7 billion, the Philippines bagged the other three spots with investment sizes of $1.2 billion (San Buenaventura coal-fired Power Plant project), $1 billion (Mactan-Cebu International Airport project), and $940 million (Thermas Visayas Power Plant project) respectively.15 This is largely the result of a strong PPP operating environment in the Philippines after the introduction of a new PPP regime which has streamlined institutional roles. The Economist Intelligence Unit conducted a study to evaluate the environment for PPPs in Asia-Pacific in 2014 and ranked the Philippines seventh out of 21 countries.16
In terms of number of projects, it is no surprise that China currently has more planned PPP projects than all other countries in the world combined. According to the Ministry of Finance's PPP database, China currently has close to 12,000 official listings.17 As private sector investment accounts for less than a third of these PPP projects,* the Chinese government is continuously exploring options to involve more private investors.
* According to Moody's Investor Service