Assessment of the Impact of the Crisis on New PPI Projects : Update 5
New private infrastructure activity in developing countries recovered selectively in the third quarter of 2009. This review of new PPI projects sheds some light on recent activity and on the short-term impact of the financial crisis. Projects reach...
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| Format: | Brief |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2010/02/16350064/assessment-impact-crisis-new-ppi-projects-update-5 http://hdl.handle.net/10986/10941 |
| Summary: | New private infrastructure activity in
developing countries recovered selectively in the third
quarter of 2009. This review of new PPI projects sheds some
light on recent activity and on the short-term impact of the
financial crisis. Projects reaching financial or contractual
closure face more difficult financial market conditions.
Local state-owned banks, as well as multilateral and
bilateral agencies, continue to be key financiers, and
infrastructure sponsors are looking for new sources of
funding such as local financing. Projects continue to be
delayed or, to a lesser extent, canceled. The rate of
project closure varies across developing regions, with
investment in the third quarter higher in South Asia, stable
in Latin America and East Asia and Pacific, and lower in the
other three. The rate also varies across country income
groups, with investment in the third quarter higher in
lower-middle-income countries, stable in upper-middle-income
countries, and lower in low-income countries. Greenfield
projects continue to show growth in investment (and debt
raised), while concessions and divestitures show a decline.
Developing countries continue to tender and award new PPI
projects. In conclusion, PPI investments have recovered in
only few economies. While these success stories have boosted
the totals, the vast majority of developing countries remain
severely affected by the crisis. If large projects (US$1
billion or more) were excluded, almost all developing
regions would have seen investment decline in the first
three quarters of 2009 compared with the same period of
2008. South Asia was the only exception, thanks to the high
level of activity in India. Among sectors, energy is the
only one where investment grew for all project sizes, thanks
to the activity in new power plants. There is also evidence
of new projects being postponed and canceled because of the
financial crisis. |
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