ASi" kUCTURE FlOR DEVELOPMENT

1~~~~D Clt ,-,.Re -b cope an tie 0 reous 0.
'tor. Financingin.this form.can be oplx and time- r e projiects. Relative to its size, Malaysia, too,
consuming, as the interests of various parties have. has been a significant user of project finance.
to, be secured through contractual agreements. The Trans,portation projects, maindy toll roads, doniequity
stake of private sponsors is typically about 30 nated the numbers and the value of projects in highpercent
of project costs and usually fonns the limit income and developing countries Crable 53). The
of their liability Private lenders (especially commer- more than two-thirds share of transport projects in
cial banks) influence project success by demanding middle-income countries reflected the extensive
performance guarantees from project sponsors. toll-road programs in Argentina, Malaysia, and
Where performance depends on govemment poiqc, Mexico. The survey estimated that twelve pow-er
such guarantees are sought from governments. The projects had been funded in middle-income counexpectation
is that projects financed on a imited- tries (a 16 percent share of all projects). This estimate
recourse basis will, over time, develop a track record is already outdated, however, with the number for
that will provide comfort for future investments. the Philippnes alone now beng eighL The sectoral
composition of -the project pipeline is constantly
ADVANCES mN rROJEcr RNNaNc.'A survey pub- changing For middle- and (especially) low-income
lished in October 1993 provided details of nearly countries, independent power projects are likely to
150 private infrastructre projects that l[ad been be an important focus for future prject financing.
funded worldwide since the early 1980s on limited- Water and environmental infrastructure is another
- -.-- recourse terms, at a total cost of more than $60 bil- growth area-projects are being undertaken in midlion
(fable 5.2). Both the number of projects and the dle-income countries (especially for wastewater
funding involved had doubled compared with an treatment), and their diffusion to low-income counearlier
sample (in September 1992). This illustrates tries is imminent A public-private partnership has
the stmng momentum in private projects, which made possible the construction of a chemical waste
firve years ago were largdy curosities.
treatment and disposal facility south of Jakarta in
About half the projects surveyed (by number and Indonesia.
value) were in developing countries, with a heavy The pipeline of projects under serious considera-.
concentration in middle-income countries. The only tion is substantiaL Public Works Financing estinates
low-income country with more than one funded that 250 projects are being considered in developing
projectcwas China (although many more projects are countries-seventy-two- of them in low-income
in the pipeline there). Argetina, Malaysia, Mexico, countries. The countries of East Asia and the Pacific
and the Philippines had the most projects. Along Rim are exected to be the biggest users of standwith
China, they represented 80 percent of the proj- alone, limited-recourse projects in the next decade.
ects for which funding had been comrmitted. Mexico This region has 150 projects in the pipeline, with an
stood out, with the largest number of limited- estimated total cost of $114 bilion China alone is es-
Table 52 Infrastructure project financing for projects fmded and in the pipeline, October1993
-: f - ~ (bitllwnsofdul&n5/- --
Number ofprocsts
Toal valucef prouts
A. veWviaeofpsec1s
Co-ntygaup Funded PWitecin Funddf Pipelne Funded Pr,liur
Woldd 148 358 63.1 235.4 0.44 0.71
High income 64 107 34.3 1121- 054 .1.05
ihddleincome -77 179. -25.7. 77.1 033 0.43
Lowincome 7 77- 3.1 46.3 0.44 - 0.64
So: P.Sblu P Wns ufic Fimd.ObeffI93.
. -.- Table 5.3 Project financing of funded infrastmcture projects, by sector, October1993
- ; - - . - - : - :Perentaedistrirut ion of pn#ects
-.Wleramd ewmnmmtalft
Co--. -;trySup Nhuberoqf pmfeElsfunded AWpmt Power Tqrnt mfrnsttur Tdecmmnotns Othr
:
World 148 - 100 13 60 16 2 10
-. lghiname 64 1.00 8 48 .25 2 17
-Middleiicome 77 100 16 69 - 10 .3 3
Lowincame 7: .00 29 57 0 0 14
SW= Pub-ic Fi:-dFtrbFc g,Odober1993. -
95