Public-private partnership

THE EURASIAN DEVELOPMENT BANK’s PUBLIC-PRIVATE PARTNERSHIP PROGRAMME

PRODUCTS

The EDB offers loans that meet the requirements of large-scale investment projects in terms of timeline, repayment schedule, designated use of funds, tranches, and other conditions.

The EDB’s products and instruments include:

Debt financing
Equity financing
Mezzanine financing
Special-purpose tranches (for the payment of interest and fees or a debt service reserve account)
Syndicated loans
Additional financial instruments (foreign exchange hedges, etc.)

In addition, the EDB, as a leading think tank with deep PPP expertise in the region, offers non-lending products such as:

Project consultancy;
Legal consultancy;
Applied research into sector- and country-specific PPP development and PPP market studies;
Disseminating PPP best practices;
Developing guidelines, standardised project documents, and PPP agreements;
Building PPP competencies using the project-based learning approach;
Roadshows for PPP projects;

The EDB’s Technical Assistance Fund resources to develop PPPs

PRIORITIES

PPPs FOR SUSTAINABLE DEVELOPMENT as a mechanism to create 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.

In EAEU+ countries, 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. The factors that constrain private investment include uncertainties around the return on investment, a lack of understanding of how to embed SDG and ESG principles in PPP projects, and a lack of accessible sustainable financial instruments as well as of regulatory incentives for such projects.

To fully unlock the potential of this market, instead of being developed as a market niche, sustainable financial instruments and investments should become a standard in both larger and smaller EAEU economies.

Building up sustainable financial instruments is a key element of the Eurasian Development Bank’s 2022–2026 Strategy. 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 that cultivates PPP projects for sustainable development in EAEU+ countries.

CROSS-BORDER PPPs as a mechanism to unlock the EAEU’s potential for integration in transport and logistics, water and energy, trade, and other areas of economic cooperation.

Cross-border and related infrastructure will eliminate infrastructure gaps and bottlenecks, and create conditions for transit through states for freer movement of goods and services, for investment, workforce mobility, and access to technology.

Pooling efforts as well as financial and other resources of the countries that are public partners in cross-border PPP projects would bring benefits that could not be achieved if the countries implemented their national PPP projects separately. Having a single private partner in such projects ensures that the PPP agreement is performed consistently and in a coordinated manner in every participating country.

However, the lack of interstate regulations and the differences between countries’ PPP laws as well as their level of PPP development, make it difficult to agree on the form and parameters of cross-border PPP projects, the terms and conditions of PPP agreements, screening procedures for a private partner, as well as risk sharing in cross-border PPPs.

In this context, the Eurasian Development Bank becomes an increasingly important link in cross-border PPP projects, as it has well-established mechanisms for cooperation with all EAEU+ countries, risk management policies for each of its member states, strong expertise in PPPs, and special financial instruments that ensure the financial viability of cross-border PPP projects.

The EDB promotes cross-border PPPs as a cooperation model that will be used to coordinate planned infrastructure projects and develop infrastructure jointly in the interests of all EAEU+ countries. This model will also include multilateral project financing partnerships between EAEU+ countries and the EDB, private and institutional investors, and development institutions.

DIGITALISATION OF PPP PROCESSES as a mechanism to help the countries increase the number of PPP projects and improve their quality.

Creating digital products that would help prepare and implement PPP projects, as well as digitising PPP-related management decisions, will save time and costs for the preparation and launching of PPP projects, streamline interaction between authorities and potential investors, foster PPP project data collection and access to such data for all persons involved in a PPP project, facilitate the planning and monitoring of PPP project activities, and, finally, ensure the coordinated management of the entire PPP portfolio (instead of a single project), including ongoing and planned projects.

The EDB helps its member states to create tools and practices for the digital transformation of their PPP initiatives through the integration of their information resources and by participating in the development and financing of PPP projects as part of the EAEU digital agenda.