PPP: Invigorating Investment Initiative in Bangladesh

Public private partnership (ppp) investment in bangladesh

To foster sustainable economic growth and achieve its development goals, Bangladesh must significantly boost private

Public-Private Partnership (PPP) investments have become a crucial element in Bangladesh's infrastructure development strategy, especially as the country progresses towards its Vision 2021 goals. These partnerships are vital for addressing the significant infrastructure deficit and for stimulating economic growth.

Key Sectors and Projects

Bangladesh has identified several key sectors for PPP investments, including transportation (roads, bridges, and ports), energy, and urban development. Notable projects include the development of the Laldia Container Terminal in Chittagong, which involves significant collaboration with international entities such as APM Terminals, a subsidiary of the Maersk Group (KPMG) .

Following Prospective Sectors under PPP

1. Power and energy
2. Transportation Infrastructure ( Roads, Rail, ports, Airport and water transport)
3. Pure drinking water and sewerage
4. Information technology
5. Air Transportation and Tourism
6. Industry
7. Education (Secondary, technical ad research)
8. Health and Family Welfare
9. Housing

Institutional Framework

The PPP Authority in Bangladesh, established under the PPP Act 2015, plays a pivotal role in facilitating these projects. It supports various government bodies in identifying, developing, and procuring PPP projects, ensuring compliance with regulatory frameworks, and enhancing the investment climate (King & Wood Mallesons).

Investment Scale and Impact

As of the latest reports, there are 79 PPP projects under implementation, with an estimated total investment value of USD 29.23 billion. These projects span various stages from feasibility studies to construction and operational phases(King & Wood Mallesons) The government has also streamlined processes for national priority projects, enabling faster execution without the lengthy tender processes typically required for other PPP projects.

International Collaboration and Capacity Building

International organizations like the World Bank and KPMG have been actively involved in capacity-building initiatives. Recently, a workshop held in Dhaka focused on enhancing PPP project management skills and unveiled a new PPP Handbook aimed at standardizing processes and improving project outcomes (KPMG).

Incentives and Financing Mechanisms

To attract more foreign investment, Bangladesh offers various incentives such as Viability Gap Funding (VGF) to ensure the financial viability of projects with high economic and social value. This funding can be disbursed during the construction phase or as periodic payments during operation, making PPP projects more appealing to private investors(King & Wood Mallesons).

Challenges and Future Directions

Despite the progress, Bangladesh still faces challenges in PPP project implementation, such as regulatory hurdles and the need for more robust contractual frameworks. Strengthening these areas is essential for sustaining long-term investment and meeting the increasing demand for climate-resilient infrastructure (Asian Development Bank) (King & Wood Mallesons).

In summary, PPP investments in Bangladesh are pivotal for its infrastructural and economic development, supported by a strong institutional framework and international cooperation. Continued efforts to enhance regulatory environments and financial incentives will be key to attracting sustained private sector participation.

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