ISLAMABAD-The Asian Development Bank (ADB) has approved $100 million loan to strengthen the standards in the development and delivery of public-private partnership (PPP) projects and help bridge the infrastructure investment gap in Sindh.

The government of the United Kingdom, through the Department for International Development, is also co-financing the project, contributing $19.23 million as grant and $4.75 million as technical assistance, both of which will be managed by the ADB. The total cost of the project is $188.98 million in which the Sindh government will be contributing $65 million.

“Sindh province continues to have large infrastructure and social service needs which PPPs can assist in addressing,” said ADB’s Country Director to Pakistan Werner Liepach. “The project will strengthen the provincial government’s capacity to identify, develop, and implement PPPs as well as boost private sector participation.”

Sindh is crucial to Pakistan’s economic future, representing 23 percent of the country’s population and 32 percent of GDP. Annual infrastructure investments in the province have been minimal over the last few years, representing only 4 percent of the total investment requirements in transport, electricity, water supply and sanitation, solid waste, telecommunication, and irrigation.

Limited resources coupled with the local government’s lack of expertise in effectively utilising its budget for meeting infrastructure needs through public procurement have contributed to the investment gap. Sindh has been developing PPP projects since 2010, however, there is still a strong need to address inefficiencies in the way PPP projects are identified, developed, and fiscally supported which can expose the provincial government to unforeseen fiscal risks.

Some of the institutional adjustments needed include the development of robust frameworks and policies in the selection of eligible and commercially viable PPP projects, structuring efficient risk participation between the Sindh government and the private sector, and rigorous risk assessments that will deliver sustainable and fiscally responsible PPP projects.

The assistance will help in leveraging private capital to augment infrastructure investments in Sindh. In addition, projects will help create jobs and generate income which will further improve the overall economic growth in Sindh.