PPP EVENTS OF THE EURASIAN DEVELOPMENT BANK
2022
ROUNDTABLE “PPPs FOR SUSTAINABLE DEVELOPMENT IN EAEU+ STATES”
1On 14 June 2022, the EDB hosted a roundtable in St. Petersburg to discuss the role of PPPs in promoting sustainable development in EAEU+ countries. The event brought together more than 20 speakers from Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan and more than 150 online participants from all the EAEU member states as well as third countries.
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- PPPs, as an instrument for the sustainable development of EAEU countries, could be used as a mechanism to build infrastructure that would bring about the economic, social, and environmental effects envisaged by the SDGs and contribute to the countries’ and EAEU+ climate and social agenda. PPP projects for sustainable development could effectively synchronise EAEU investment in achieving the SDGs and ESG-aligned private investment. Private investors can see PPPs for achieving the SDGs as an investment in sustainable infrastructure that will bring long-term increases in the value of equity and revenues, as it will create new, SDG- and ESG-compliant, sustainable investment products and services, the demand for which is growing, and reduce ESG risks.
- In the EAEU, the market in infrastructure investment for sustainable development, including as part of PPP projects, is still evolving, with regulations and methodologies being designed, national taxonomies approved, the offering of sustainable financial instruments extended, and sustainable investment on the rise. Its prospects will largely depend on whether EAEU member states pursue a coordinated policy, and devising such a policy seems more feasible while the market is still forming rather than when all EAEU countries already have their established mechanisms and rules in place. The countries could develop a common approach to the evaluation and verification of infrastructure projects as well as PPP projects for sustainable development or agree on the mutual recognition by EAEU countries of the results of such evaluation and verification when these are conducted at the national level. There is a need for a common vision of how PPPs will be regulated to promote sustainable development in EAEU countries. Importantly, the EAEU policies for the development of infrastructure investment for sustainable development should build on the existing international standards and practices, but remain consistent with national development objectives, the countries’ ESG agendas, and the overall EAEU sustainable development agenda.
- The amounts of private investment in sustainable infrastructure channelled through PPP projects in the EAEU are still insignificant. The factors that constrain private investments include uncertainties around the return on investment, the lack of understanding of how to embed SDG and ESG principles in PPP projects, unwillingness to invest time and effort in studying sustainable PPP investment, the lack of practice in using ESG standards in PPP projects, the insufficiency of accessible sustainable financial instruments as well as the lack of regulatory incentives for such projects. It is necessary to raise awareness among private investors of the potential benefits of their involvement in PPP projects that contribute to the SDGs in EAEU countries and comply with ESG standards. Private investors should be incentivised, both legally and financially, to invest in sustainable infrastructure under PPP projects.
- The bulk of sustainable investment goes into PPP projects in energy, transport, and waste management. Health, education, sports, tourism, and agriculture are among the sectors that could scale up PPP projects for sustainable development.
- To fully unlock the potential of this market, sustainable financial instruments and investments should be transferred from a “market niche” to a “market norm” in both larger and smaller EAEU economies. Governments and other stakeholders in PPP projects for sustainable development, such as institutional and private investors, stock exchanges, national PPP centres, and financing institutions, especially multilateral development banks, need to pool and coordinate their efforts to this end.
- Building up sustainable financial instruments is a key element of the Eurasian Development Bank’s 2022–2026 Strategy. The EDB has established an internal ESG platform and a Directorate of Social and Green Initiatives and approved a Green and Social Debt Instruments Framework, as well as other internal regulations that govern its ESG-finance business processes. At the end of 2021, the EDB floated its debut green and social bonds for a total of KZT 40 billion and plans to expand its financing of PPP projects that contribute to the SDGs. In financing sustainable projects, the Bank aims to attract more private capital by reducing the risk and cost of funds for the funded projects.
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The evolution of sustainable financial instruments and the new processes of making investment decisions on PPP projects that contribute to the SDGs require that public and private project participants develop additional competencies. Building expertise and management capacity in preparing and implementing PPP projects that address the SDGs and comply with ESG principles is also key to ensuring sustainable development in EAEU+ countries.
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The Eurasian Development Bank could become an effective platform for coordinating these activities, consolidate resources for building sustainable infrastructure, and operate as a competence centre cultivating PPP projects for sustainable development in EAEU countries.
WORKSHOP “PREPARING AND LAUNCHING PPP PROJECTS IN THE PRIORITY SECTORS OF THE KYRGYZ ECONOMY: LESSONS LEARNED AND INTERNATIONAL BEST PRACTICES”
On 7–8 December 2022, the EDB hosted a two-day workshop in Bishkek for 32 representatives of Kyrgyz government organisations and agencies, including the President’s Office, the National Investment Agency, the PPP Centre, the Ministry of Finance, the Ministry of Transport and Communications, the Ministry of Education and Science, the Ministry of Health, and the Bishkek Mayor’s Office. The workshop was intended to build practical competencies in structuring and supporting the implementation of PPP projects. The trainers were experts from the Eurasian Development Bank (Svetlana Maslova, Sergey Paseko, and Azamat Tyuleubay) and PPP Expertise Eurasia Ltd. (Sergey Samolis and Remir Mukumov).
The participants formed three project teams that worked on PPP case studies (a road-building project, a health facility, and a waste management facility) to learn how:
- To make management decisions at the key stages of the PPP lifecycle (selecting the form of PPP, bidding, risk sharing, financial modelling, and achieving the financial closure);
- To negotiate with the private partner and the financing institution; and
- To align a PPP project with the SDGs.
The workshop was also used as a platform to disseminate international best PPP practices as well as the EDB’s expertise in financing PPP projects in Eurasia.
2022
PPP EVENTS ATTENDED BY THE EURASIAN DEVELOPMENT BANK
International PPP Forum (Bishkek, Kyrgyz Republic)
On 5 and 6 October 2022, the EDB took part in the International PPP Forum in Bishkek hosted by the PPP Centre at the National Investment Agency under the President of the Kyrgyz Republic.
Svetlana Maslova, Vladimir Yakunin, and Sergey Paseko made presentations on the EDB’s PPP activities.
In addition, the Eurasian Development Bank and the PPP Centre signed a memorandum of understanding and cooperation at the Forum.
Workshop “How to Design PPP Projects Aligned with the Sustainable Development Goals"
On 19 October 2022, the EDB took part in a workshop titled How to Design PPP Projects Aligned with the Sustainable Development Goals hosted by Armenia’s Ministry of Economy and the United Nations Economic Commission for Europe in Yerevan.
Conrad Albrecht made a presentation on the EDB’s operations.
FIRST EURASIAN CONGRESS ON INTERNATIONAL LAW
From 29 October to 10 November 2022, the Gumilyov Eurasian National University (Astana, Kazakhstan) hosted the First Eurasian Congress on International Law. The event brought together academia, international institutions, and public organisations from Kazakhstan, Tajikistan, and Russia.
Svetlana Maslova made a presentation on the Eurasian Development Bank’s role in promoting PPPs that contribute to the SDGs in Eurasia at the congress’s final session, the International Research-into-Practice Conference titled Law, Environment, and Sustainable Development: Status and Prospects.