Govt Approaches AFDB for Loan to Boost Private Sector Participation

The government has submitted an application for a loan aimed at financing and creating an enabling environment, as well as building the requisite capacity for private sector participation in infrastructure and related services through public-private partnerships (PPPs). The loan will be used to finance what has been styled the “Public-Private Partnership Capacity Strengthening Project.” [ihc-hide-content ihc_mb_type="show" ihc_mb_who="1,2,3,4" ihc_mb_template="1" ] This is according to a letter from the Public-Private Partnerships Coordinator at the Ministry of Finance, Boniface Mphetlhe, addressed to the AFDB’s Southern African Regional Development and Business Delivery Office (RDGS) in Pretoria. “This letter serves as a follow up to our meeting of 15 th May 2018 and subsequent discussions, including the meeting of 9 th February 2022 between your office and ours on how the African Development could support the PPP imitative in Botswana,” he wrote. Mphetlhe indicated that the Botswana Government’s request foresees support in the following areas/components: “Component 1: strengthening of the regulatory and institutional framework for PPPs. This includes the preparation of PPP manual, guidelines and standard documents and reviewing of the PPP policy.” The letter also indicates that Component 2 involves PPP capacity development and outreach. It explains: “This is concerned with a PPP capacity need assessment, capacity building for project appraisal, contract management, public policy and monitoring and evaluation.” This will be through training, attachments and study tours, building PPP capacity across key ministries, including support to feasibility studies; as well as transaction advisory services to support the implementation of selected pilot projects According to a appraisal report prepared by the World Bank, the estimated total project cost is USD 168,710 (about P2.1 million), of which the Bank will provide USD 134,970 (about P1.7 million) to be funded under the Middle-Income Countries Technical Assistance Fund (MIC TAF). “The government will contribute the equivalent of USD 33,742 in local currency (about P433 thousand), mostly in kind” to the total amount (P2.1 million) required for the project. “The MIC grant will finance a PPP training institution/firm to undertake most activities under Component 2 as well as develop the PPP Manual/Guidelines under Component 1,” the report says. Some resources will be set aside for other PPP training. The report says this will finance the preparation of Regulations and changes to the structure of the PPP Unit under the Ministry of Finance. It states that by strengthening the existing PPP regulatory and institutional framework and building the requisite capacity across government, the proposed project (loan) is expected to have a positive impact on Botswana’s ongoing efforts to bridge its infrastructure funding gap through PPPs and enhance private sector participation in the economy, both of which are central to the BoB’s support in Botswana. “It will, furthermore, complement existing Bank-funded projects in Botswana, particularly the ongoing Economic Recovery Support Programme. These complementary interventions will achieve significant development outcomes and contribute to the attainment of Botswana’s medium-term development goals,” the report says. This Project complies with applicable Bank policies, it notes. The report also recommends that the Director General, RDGS considers and approves an amount not exceeding USD 134,970 million (about P1.7 million) to Botswana from the resources of the Middle-Income Countries. “The Director General is also invited to note that the scope of the project is significantly scaled down due to resource constraints,” the report says. “Subject to availability of MIC TAF resources in 2023 and performance of the project, another request will be submitted, in a phased approach, to finance additional activities that will sequentially build on the activities financed by the proposed project.” The appraisal report says the anticipated higher private sector participation in economic activity as a result of this technical assistance will boost the government’s economic diversification agenda. “The project will complement the ongoing Governance and Economic Recovery Support Programme (Component 2.2: Improving the Enabling Environment for Private Investments), and facilitate implementation of the Zambezi Integrated Agro-Commercial Development Project, 50MW Solar PV IPP, and the Glen Valley,” says the report. It notes that the project is justified on the following grounds: It will create value for money and sustainability in infrastructure service delivery by enabling the government to harness private sector efficiency and effectiveness in project management, enhancing innovation, ensuring faster delivery and facilitating optimal risk sharing in infrastructure service delivery. It will also contribute to the government’s industrialisation efforts, including the development of Special Economic Zones (SEZ). The report says the project will strengthen regulatory and institutional framework for PPP, thereby helping to attract private investments and contribute to the government’s inclusive growth and economic transformation agenda It will also create opportunities for the local private sector through new PPP projects. “Small businesses will have the opportunity to partner with larger businesses through management contracts, joint ventures and subcontracting arrangements. Huge opportunities exist for small businesses in areas such as waste management,” it says. [/ihc-hide-content]

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Govt Approaches AFDB for Loan to Boost Private Sector Participation

The loan will be used to finance what is known as the Public-Private Partnership Capacity Strengthening Project

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Govt Approaches AFDB for Loan to Boost Private Sector Participation

The loan will be used to finance what is known as the Public-Private Partnership Capacity Strengthening Project

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