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ADB Rates Public-Private Partnership Project in Pakistan As Successful

The Independent Evaluation Department (IED) of the Asian Development Bank (ADB) has rated technical assistance for 'Pakistan: Strengthening the Federal Public-Private Partnership Framework and Enabling Reforms for Infrastructure Financing Support', as successful and relevant. The IED in its validation report stated that the technical assistance (TA) project was to help strengthen the enabling environment for infrastructure financing in Pakistan through capacity development, research, and policy advice. The TA's expected impact was informed decision-making by the government on reforms to increase infrastructure investments in the country. Pakistan's insufficient investments in critical and quality public infrastructure have been hindering its economic growth. Recognizing the importance of addressing the issue, the federal government actively promoted public-private partnerships (PPPs) as a viable approach to attract private-sector investments. To strengthen the PPP framework at the federal level, the govern ment initiated several reforms, including the enactment of the Public-Private Partnership Authority Act in 2017, the establishment of the Public-Private Partnership Authority (P3A), and the proposal to create a viability gap fund (VGF). The government also aimed to operationalize the Pakistan Development Fund Limited (PDFL) for financing key infrastructure and PPP projects. However, challenges around establishing institutional, regulatory, and financial mechanisms for an effective PPP framework remained. These challenges included (i) inadequate legal, regulatory, and institutional frameworks for PPP investments; (ii) lack of a government financial support mechanism; (iii) weak government agency to identify, structure, and finance PPP projects; (iv) limited capacity of and coordination among government agencies; and (v) underdeveloped and shallow debt capital markets. The TA's target outcome was in line with Pakistan 2025: One Nation, One Vision, the country's long-term strategy and roadmap, which aimed to accelerate Pakistan's development to become an upper middle-income economy by 2025. The roadmap was based on seven pillars, including the need to address the country's infrastructure deficit and increase private sector investment in key infrastructure and services through PPPs. The TA was included in ADB's country operations business plan for Pakistan, 2018-2020, and was aligned with ADB's country partnership strategy for Pakistan, 2015-2019, to assist the government in improving the legal and regulatory framework, developing financing mechanisms, and building the capacity of institutions for PPPs. The TA was also in line with ADB's Strategy 2030 operational priority of strengthening governance and institutional capacity. According to the TCR, the outcome was achieved. Recommended reforms from the TA outputs were incorporated as policy actions for the Third Capital Market Development Program (subprogram 2). Also, certain outputs were included in the concept paper for the Promoting Sustainable Public-Private Partnerships Program (subprogram 1). The TA successfully provided support to develop institutional, legal, and regulatory frameworks for PPPs; provided support to operationalize the P3A; enhanced the infrastructure finance and PPP capacity of key government agencies; and identified potential reform areas for the development of long-term debt capital markets. Support for a PPP infrastructure project (the Sialkot-Kharian Motorway Project) was provided to P3A. The TA recommended reforms, which were reflected as policy actions for the Third Capital Market Development Program (subprogram 2). Considering the relevance, effectiveness, and efficiency assessments, this validation assesses the TA successful. The validation assesses the TA likely sustainable given enhanced government capacity and their endorsement of TA findings. Source: Pro Pakistani

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