Pakistan among top-5 for private infrastructure investments in 2017: WB

ISLAMABAD: Private sector invested around six billion dollars in energy, transport, water and IT backbone projects during the last year, making Pakistan as one of the top five countries in the world in terms of private participation in infrastructure, the World Bank said.

“The five countries with the highest levels of investment in 2017 were: China, with $17.5 billion across 73 projects; Indonesia, with $15.4 billion across 11 projects; Mexico, with $8.6 billion across 20 projects; Brazil, with $7.3 billion across 24 projects; and Pakistan, with $5.9 billion across four projects,” the Washington-based lender said in a latest report.

“These five countries attracted $54.5 billion, and captured 58 percent of global investment. This share was six percent lower than in 2016 and 10 percent lower than the five-year average.”

Private participation in infrastructure (PPI) investment in 2017 at $93.3 billion across 304 projects marks an increase of 37 percent from 2016 levels.

“Yet, it still remains the second lowest level of investment in the past 10 years and is 15 percent lower than the past 5-year average investment level of $109.8 billion,” the World Bank said. “The increase over 2016 levels can be attributable to a few megaprojects in China and Indonesia as well as a recovery in South Asia, led by Pakistan.”

Chinese pledged more than $50 billion in infrastructure developments under China-Pakistan Economic Corridor projects – more than half of the commitment is for energy sector.

The bank, however, said the share of commercial financing in private sector’s projects remained insignificant at seven percent during the last year.

“Barring Mexico, for which the share of commercial financing was 63 percent, the share of commercial financing in the other top five investment destinations was quite low,” it added. In total, 105 projects received some form of development finance institution support, out of total 304 projects that got $93.3 billion of private investment commitments from 52 countries in 2017.

The World Bank said the South Asia Region attracted $11.7 billion in investments

in 2017, which was 90 percent higher than the 2016 level. This increase was mainly driven by Pakistan, (whose investments were) far above the 2016 level of $1.7 billion.

“In 2017, this rise put Pakistan on the list of the world’s top five PPI investment destinations. For the first time ever, investment in Pakistan surpassed that of India, which has traditionally been the heavyweight in the region,” it added. “India saw a slight increase in investment from $4.3 billion in 2016 to $4.8 billion in 2017.”

The bank said of the total investment, 70 percent was debt-financed, with 24

percent of this raised from bilateral providers, and 22 percent from commercial providers. Overall, international sources financed 55 percent of the debt. Private sources financed 45 percent of investment, public sources financed 25 percent, and development finance institutions—which are both multilateral and bilateral—financed 30 percent.

Of 197 electricity generation projects, 173 were in renewables, which accounted for 61 percent of total electricity generation investment, and 57 percent of total capacity (16.4 out of 28.9 gigawatts).