Investment mobilised

Investment mobilised

For every $1 of PIDG member funding, projects PIDG has supported have mobilised $23, of which $17 comes from private sector financing.

A key part of PIDG’s mission is to mobilise private sector funding; PIDG companies leverage donor funding, blending it with private sector investment (PSI) from local, regional and international sources, and debt or equity from Development Finance Institutions (DFIs).

Since 2002, for every dollar of PIDG member funding, projects PIDG has supported have mobilised $23, of which $17 comes from the private sector. This method also accounts for funds reinvested and raised by PIDG companies, and is compared to the 2017 mobilisation per dollar of PIDG commitments. PIDG’s focus on frontier countries is evident from the fact that 53% of total funding mobilised was in DAC I and II countries and 52% in Fragile and Conflict-Affected States.

There is a need to mobilise trillions of dollars of private sector money alongside the billions invested by public sector institutions. Donors and other stakeholders need a clear picture of how Private Sector Investment (PSI) is mobilised.

To avoid double-counting, the amounts raised on each transaction need to be attributed to the DFIs involved. The OECD has been developing a methodology for this and PIDG provides the relevant numbers to them. When the methodology has been extended to all funding instruments, and agreed with other public sector funders, PIDG will report in line with it.

During 2017, PIDG-supported projects mobilised private sector funding in various ways, including:

  • EAIF participated in a B loan on Central Termica de Ressano Garcia (CTRG) which raised PSI of $79m in equity and debt, while its participation in a bond issue for Helios Towers Africa led to $540m of investment from the private sector.
  • GuarantCo provided guarantees to projects which will raise $641m of PSI, including $301m from domestic sources.
  • DevCo’s work to enable Myanmar’s first internationally competitively-tendered IPP for a combined-cycle power plant in Myingyan led to a project raising $325m in private sector debt and equity.
  • InfraCo Asia sold its interests in the Gul Ahmed and Metro Wind Power projects in Pakistan to Daelim Energy, a Korean-based private sector company.

Cumulative commitments mobilised by PIDG activities, by sector ($m)

Total Investment CommitmentsPrivate Sector InvestmentDFI InvestmentGrant**
Agri-infrastructure552.6291.0249.911.7
Energy*13,458.18,325.15,074.958.1
Housing367.2277.290.0-
Industrial Infrastructure2,522.91,504.71,018.2-
Mining655.0346.7308.3-
Multisector509.2263.0241.25.0
Telecoms9,929.18,000.01,929.1-
Transport5,134.73,493.61,641.1-
Urban development/ Infrastructure4.84.8--
Water, Sewerage and Sanitation545.3378.0160.86.5
Total33,678.922,884.110,713.581.3

Notes

* The TIC and PSI figures exclude DevCo’s Central Java IPP project which, at $4.3bn mobilised PSI funding, would have a misleading impact on the percentages for DAC I/II and FCAS
** Grants are included in TICs for projects funded by DevCo, InfraCo Africa and InfraCo Asia, as these are a key part of PIDG’s efforts to make the projects viable


Mobilisation of funding by PIDG-supported projects reaching financial close in 2017 ($m)

PIDG commitments to projects reaching financial close in 2017* **451.7
DFI commitments made alongside PIDG to projects reaching financial close684.4
PSI commitments to all projects reaching financial close1,605.4
Total Investment Commitments recognised in PIDG results2,496.5
Of which: Total PSI commitments recognised in PIDG results1,605.4
Comparison:
Amount of PSI mobilised in 2017 for every $1 of member funding (Total PSI / Total Member Disbursements in 2017)16.9
Amount of PSI mobilised in 2017 for every $1 of PIDG commitments (Total PSI / Total PIDG commitments)3.6

Notes

* This includes $242m of guarantees from GuarantCo: $13.8m of which was a guarantee to a DFI and $228.5m was in guarantees to PSI
** This figure excludes $16.8m of grants from DevCo and TAF that are not included in the mobilisation figures

Percentage of Total Investment Commitments in Fragile and Conflict-Affected States by sector (cumulative)

Agri-infrastructure87%
Energy41%
Housing7%
Industrical infrastructure85%
Mining0%
Multisector41%
Telecoms70%
Transport41%
Urban development/ infrastructure0%
Water, Sewerage and Sanitation10%

Percentage of Total Investment Commitments in Least Developed and Other Low Income Countries (LDC & OLIC) (DAC I/II) by sector (cumulative)

Agri-infrastructure88%
Energy39%
Housing0%
Industrial infrastructure43%
Mining100%
Multisector54%
Telecoms68%
Transport63%
Urban development/ infrastructure100%
Water, Sewerage and Sanitation13%

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