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Infrastructure & PPPs in Bangladesh and Sri Lanka - Q4 2022 Update

YOG INFRA Q4 2022 insights

BANGLADESH has, in the last quarter, received technical assistance from DFIs to continue infrastructure development, with a focus on renewable energy & energy efficiency projects. SRI LANKA aims to take necessary steps to reduce sovereign debt burden, and slow growth is expected in near future with regards to PPPs being used for infrastructure development,

Read more about key developments in Infrastructure and PPPs in the two countries in our latest insight.

 

Bangladesh

ADB AGREES TO FINANCE BANGLADESH INFRA PPPS

The Asian Development Bank (ADB) has agreed to fund infrastructure projects in the public private partnership (PPP) model in Bangladesh. The Manila-based multilateral lender will provide USD 278.3 Mn. The financing, under the second tranche of the Third Public-Private Infrastructure Development Facility, will back investments in social infrastructure projects, renewables and energy efficiency.

The second tranche will finance at least 5 infrastructure subprojects and 2 subprojects in renewables and energy efficiency. The first tranche supported 8 infrastructure and 2 renewables and energy efficiency subprojects, catalyzing USD 457 Mn in private sector investments.


ENVISION ENERGY TO BUILD WIND FARM IN BANGLADESH

Envision Energy will build a 55 MW wind farm at Mongla in Bangladesh's Bagerhat district. The company has signed a 20-year power purchase agreement with state-owned Bangladesh Power Development Board, which will purchase all the electricity generated from the plant at BDT 10.56 (USD 0.132) per kilowatt hour. The company expects to complete the project by 2024.

Bangladesh has a target to generate more than 4.1 GW electricity from renewable energy sources by 2030.


FOURTH PARTNER TO BUILD BANGLADESH SOLAR PROJECTS FOR DECATHLON

Sporting goods retailer Decathlon has signed a partnership with Indian renewable energy company Fourth Partner to procure solar power in Bangladesh. In the first phase of the tie-up, Fourth Partner will build rooftop solar projects with a capacity of 15 MW for Decathlon's supplier network in Bangladesh. The partnership is for 3 years, during which the developer will build solar plants across 12-15 locations.

Fourth Partner, backed by the Norwegian Investment Fund for Developing Countries (Norfund), owns an operational capacity of about 5 MW in Bangladesh. It will start construction immediately for the new capacity. Fourth Partner is targeting an operational portfolio of 150 MW in Bangladesh by 2025.

Hyderabad-based Fourth Partner focuses on distributed solar solutions for corporate and industrial customers. The company's portfolio comprises floating solar, wind and hybrid projects. It also develops electric vehicle charging infrastructure. It owns close to 1GW of operational renewable power assets across South and Southeast Asia and plans to develop battery storage solutions in India, Vietnam, Indonesia, Sri Lanka and Bangladesh.


Sri Lanka

SRI LANKA BUDGET PUSHES REFORM AMID GREEN ECONOMY FOCUS

The Sri Lankan government has responded to an economic crisis with a series of measures, including infrastructure investment, aimed at increasing revenue, reducing public debt and reigning in inflation.

A move to a green and blue economy, focusing on green hydrogen in a public-private partnership model;

  • Monetise environment-friendly infrastructure to access green finance;

  • Divest and restructure state-owned enterprises;

  • Implement a logistics development program;

  • Regulatory and public service reforms;

  • Setting up a new investment agency;

  • Developing four new economic zones; and

  • Strengthening the tax administration.

The country’s total foreign debt exceeds USD 51 Bn, of which USD 28 Bn has to be repaid by 2027. The government expects to increase revenue from taxes to LKR 3.1 Trn (USD 8.5 Bn) from LKR 1.3 Trn in 2021. The country’s foreign currency reserves deteriorated sharply to USD 1.7 Bn - including a swap to the tune of USD 1.5 Bn from Bank of China - as at September 2022, from a healthy USD 7 Bn in December 2018.


SRI LANKA IDENTIFIES 28 ISLANDS FOR DEVELOPMENT

Sri Lanka’s Urban Development Authority has identified 28 islands within the periphery of its Northern Province that it intends to develop to boost tourism. The authority aims to create the required physical and social infrastructure.

Some of the projects include a marina, a heritage city, an anchorage for yachts, as well as luxury properties, similar to the Maldives.

A model of implementation is yet to be worked out. The land for development could either be handed over as a long-term lease ranging between 30-99 years, or the government may opt for a public-private partnership (PPP) model such as a design, build, finance, operate and transfer method.

In the PPP model, the land will be allocated to the investor on an income sharing basis or any other suitable method that benefits both parties. The base value of the land will be decided by the government’s chief valuer. A new authority will be set up to oversee the development of the islands. Once established by a parliamentary act, the new body will decide the model of implementation. Investors will be selected through a competitive bidding process.

 

Our objective is to drive economic growth and make positive social impact through sustainable infrastructure development. ​

YOG INFRA is an infrastructure focused financial advisory firm. We work with Developers and Development Finance Institutions (DFIs) and help them make informed investment decisions across infrastructure development lifecycle.

With our offices in Singapore and India, we work on projects globally, and the team brings strong experience in supporting development of infrastructure projects.


For more information about us, our service offerings and team, please visit www.yoginfra.com Contact us at info@yoginfra.com


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