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Public Private Infrastructure Advisory Facility
Helen Jones: To ask the Secretary of State for International Development (1) what UK Government representation there is at the Public Private Infrastructure Advisory Facility; what UK involvement there is in its decision-making; and if he will make a statement; [82471]
(2) what assessment he has made of (a) the value for money supplied from UK public funds of the Public Private Infrastructure Advisory Facility and (b) whether the facility provides quality development assistance which has positive impacts on citizens in developing countries by helping to relieve poverty; and on what evidence those assessments are based; [82472]
(3) when the Government last reviewed their involvement in the Public Private Infrastructure Advisory Facility; and what the results were of the review; [82473]
(4) what recent assessment he has made of the (a) role and (b) value of the consensus-building activities of the Public Private Infrastructure Advisory Facility; and if he will make a statement; [82474]
(5) what the timetable is for decision-making on the annual allocation of funds to the Public Private Infrastructure Advisory Facility; and what public consultation will take place prior to any decision on this allocation. [82749]
Hilary Benn: Improving infrastructure is essential for achieving economic growth in developing countries. There is also a pressing need to increase the efficiency of infrastructure to give greater access to the poor and better value for money. Current investment flows are insufficient to fund these additional needs and the public sector alone cannot bridge the financing and efficiency gaps. A significant contribution from the private sector will be required. However, attracting private capital and participation is difficult—according to World Bank figures, private investment in developing country infrastructure fell from US$ 49.6 billion in 1997 to US$ 12.5 billion in 2003.
Among the main constraints to successful private sector participation in infrastructure are the lack of appropriate policies, laws, regulations and institutions and the weak capacity of the public sector to effectively manage private sector involvement. The PPIAF is a global technical assistance facility managed by the World Bank to address these constraints and, where requested to do so by developing country governments, facilitate and, where appropriate, raise the quality of private sector involvement in infrastructure. The PPIAF is a good example of successful donor harmonization in development. It is supported by 14 donors with a wide range of skills, knowledge and experience. As of April 2006, it had approved $US 108.7 million funding for 495 activities in 101 countries. This funding mobilised an additional US$ 59.8 million co-financing from governments and other donors.
A particular strength of the PPIAF is its open and transparent systems of governance. These include procedures governing the application for and allocation of activity funds. As a partner in a multilateral facility, DFID abides by the endorsed systems and governance arrangements.
DFID fully endorses the PPIAF's objective to help developing countries to improve the quality of their infrastructure to the benefit of the poor through effective public-private partnerships. In practice, this is largely achieved by helping governments improve their policies, laws, regulations and institutions (their "enabling environment"). Our other objectives are to encourage greater donor coordination in designing solutions to meet the demands of developing countries, reducing transaction costs for developing countries and effective dissemination of lessons learned.
DFID does not earmark its contribution to the PPIAF. Funding is pooled with that of other donors. The breakdown of total PPIAF expenditure in US$ by sector for each of the last three years is provided in the table. Future allocations will depend on demand from governments of developing countries.
| 2003 | 2004 | 2005 | |
As a partnership arrangement, the PPIAF is jointly governed. The PPIAF has four policy and administrative organs. DFID is represented on the first two:
The Program Council is the governing body of the PPIAF, composed of representatives of the 14 donors contributing resources to the PPIAF, and chaired by the World Bank. The Program Council, which meets once a year around June time, is responsible for defining programme policies and priorities, approving an annual work plan and financial plan, reviewing PPIAF performance and overseeing other PPIAF organs.
The Donor Steering Group provides strategic direction to the Program Council. Membership of this group is on a voluntary basis and decided in consultation with the full Program Council.
The Technical Advisory Panel (TAP), comprises six international experts, it provides independent advice on strategy and evaluates the impact of the PPIAF programme by carrying out evaluations of a sample of PPIAF projects.
The
PPIAF Program Management Unit (PMU) is responsible for managing the
day-to-day operations of the facility with a
focus on reviewing proposals, arranging delivery of PPIAF programmes and
activities, and proposing and administering the work plan and
budget.
Further details on these organs and the PPIAF governance structure are provided in the PPIAF Program Charter, dated May 2001, as amended from time to time, available from its website:
www.ppiaf.org
All project proposals are assessed for value for money and their potential for impact by the PPIAF. Once approved, all activities follow World Bank procurement rules that require open and transparent competition to ensure value for money. A sample of activities are systematically evaluated by the Technical Advisory Panel of independent experts that reports to the Programme Council. PPIAF evaluations have confirmed that 84 per cent. of its activities have satisfactorily achieved their original objectives.
In 2004, PPIAF donors also commissioned an independent evaluation—the 'Strategic Review', of the first five years of PPIAF's operations. The objective was to evaluate PPIAF's progress against its original objectives and identify ways for improving its performance. The report, issued in the final quarter of 2004, was very positive, concluding that the PPIAF is making an important contribution to development.
A number of recommendations were made that the PPIAF has since implemented. The recommendations included strengthening the strategic direction of the programme; increasing stakeholder involvement in the Program Council, more focus on outcomes ratherthan outputs; enhancing PPIAF's identity as an autonomous multi-donor facility and improving impact measurement.
Changes facilitated by the PPIAF often take a few years to deliver the anticipated improvements to the enabling environment. This has made it difficult to assess direct poverty impact to date. Improving impact measurement is an issue that is currently being addressed. One proposal is that PPIAF activity should be more closely anchored to planned infrastructure projects. Further work is in hand to gauge the impact of PPIAF activity on the International Financial Corporation's national 'doing business' ratings that address various aspects of the enabling environment.
Country-specific activities may be undertaken only where governments seek the assistance of the PPIAF.
Consensus building is essential if reforms are to be successful. Governments are responsible for leading the process. The PPIAF has played an important supporting role. For example, the PPIAF has supported the development of a series of training courses on utility regulation and finance that have been targeted at key stakeholder groups including Ministers and senior Government officials, journalists and consumer associations. The aim of the training courses is to equip stakeholders with a sound knowledge on which to appraise reforms. Two training workshops have also been held for stakeholders. The first workshop was held in South Africa in June 2005 and the second was held in Costa Rica in February 2006. Feedback provided to PPIAF on the workshops has been very positive.
DFID last
reviewed its involvement with the PPIAF in July 2005, when considering
a request for continued
support. This review drew heavily on the findings of the independent
strategic review and progress on implementing its recommendations. The
strategic review reported that the PPIAF has a comparative advantage
over other facilities by demonstrating clear focus, global reach,
strong donor support and efficient management. It confirmed that demand
for PPIAF services by governments of developing countries is growing
and that continued DFID support is critical to growth and increasing
the leverage of funds required for scaling up. On this basis, DFID
agreed to continue its contribution to PPIAF for a further three-year
period—July 2005 to June
2008.
Donors are asked annually to consider a financial plan incorporating an estimate of future calls on donors based on the anticipated demand by governments. The PPIAF then considers requests for funding from governments once a quarter in light of available funds and donor pledges. DFID has agreed an indicative biannual payment schedule for meeting our commitment to the PPIAF based on the financial plan. DFID funds are only ever released on evidence of need and good performance.
DFID consults with members of the public, NGOs and other stakeholders when setting the UK policy for international development. It is not practical to consult the public on the many individual funding decisions that DFID takes to deliver this policy.
Stephen Hesford: To ask the Secretary of State for International Development (1) what assessment the Government have made of the likely impact on poverty alleviation in donor countries of the private infrastructure advisory facility; and if he will make a statement; [82582]
(2) what assessment the Government have made of the value for money of the UK's involvement with the public private infrastructure advisory facility; and if he will make a statement; [82583]
(3) how the Government seeks to influence the activities of the public private infrastructure advisory facility; what recent representations the Government have made; and if he will make a statement; [82584]
(4) what the objectives are of UK involvement in the Public Private Infrastructure Advisory Facility; what UK funding has been provided in each year to the Facility for (a) energy production, (b) the water industry and (c) other functions; and what UK funding has been allocated in each of the next three years. [82585]
Hilary Benn: Improving infrastructure is essential for achieving economic growth in developing countries. There is also a pressing need to increase the efficiency of infrastructure to give greater access to the poor and better value for money. Current investment flows are insufficient to fund these additional needs and the public sector alone cannot bridge the financing and efficiency gaps. A significant contribution from the private sector will be required. However, attracting private capital and participation is difficult—according to World Bank figures, private investment in developing country infrastructure fell from US$ 49.6 billion in 1997 to US$ 12.5 billion in 2003.
Among the main constraints to successful private sector participation in infrastructure are the lack of appropriate policies, laws, regulations and institutions and the weak capacity of the public sector to effectively manage private sector involvement. The PPIAF is a global technical assistance facility managed by the World Bank to address these constraints and, where requested to do so by developing country governments, facilitate and raise the quality of private sector involvement in infrastructure. The PPIAF is a good example of successful donor harmonization in development. It is supported by 14 donors with a wide range of skills, knowledge and experience. As of April 2006, it had approved $US 108.7 million funding for 495 activities in 101 countries. This funding mobilised an additional US$ 59.8 million co-financing from governments and other donors.
A particular strength of the PPIAF is its open and transparent systems of governance. These include procedures governing the application for and allocation of activity funds. As a partner in a multilateral facility, DFID abides by the endorsed systems and governance arrangements.
DFID fully endorses the PPIAF's objective to help developing countries to improve the quality of their infrastructure to the benefit of the poor through effective public private partnerships. In practice, this is largely achieved by helping governments improve their policies, laws regulations and institutions (their "enabling environment"). Our other objectives are to encourage greater donor coordination in designing solutions to meet the demands of developing countries, reducing transaction costs for developing countries and effective dissemination of lessons learned.
DFID does not earmark its contribution to the PPIAF. Funding is pooled with that of other donors. The breakdown of total PPIAF expenditure in US $ by sector for each of the last three years is provided in the table below. Future allocations will depend on demand from governments of developing countries.
| 2003 | 2004 | 2005 | |
The PPIAF has good systems for assessing outcomes. The following table provides broad details of these by main category since the PPIAF's inception in 1999 to December 2005.
| PPIAF activities 1999-2005 | |
| Category | Completed activities |
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