ey presentation at ifc ppp forum in bishkek 21 january 2015
TRANSCRIPT
“Attracting private investment through public-private partnerships” forumBishkek, January 21, 2015
Challenges to implementing PPPs in Central Asia
Presenter: Jannat Salimova-Tekay,Head of Project Finance and Infrastructure Group in Central Asia and CaucasusSenior Manager at Transaction Advisory Services (TAS), EY
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Goal and plan
Why do governments choose PPP approach (e.g. fiscal
considerations, technology transfer, development of financial markets)? There should also be a
pipeline of projects that meet those goals.
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Rush and inadequate timing
Unrealistic schedules result in failed tenders. Repeated tenders
erode investors’ interest. Insufficient competition leads to
government overpaying.
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Risk sharing: optimal not maximum
Most governments try to transfer risks that are not natural to private parties. Attempts to
mitigate them by private parties result in higher whole-of-life
costs. This leads to government overpaying.
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Institutional capacity
All countries of Central Asia are yet to complete their successful
PPP transactions. There is no experience within governments on such projects. Therefore, first projects will need to rely heavily
on experienced consultants.
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Most projects will depend heavily on long-term financing. In most
countries of the region local currency debt is severely scarce.
Hence, governments need to provide a guarantee against
foreign exchange risks.
Financing
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Jannat Salimova - TekaySenior Manager, Transaction Advisory ServicesProject and Infrastructure Finance Advisory
Email: [email protected].: +7 727 258 5960
Ernst & Young Advisory LLPTransaction Advisory ServicesAl-Farabi av., 77/7 050060 Almaty Republic of Kazakhstan
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