Two OPIC deals named on IFC’s list of top public-private partnerships
Public-private partnerships have long been at the core of OPIC’s work supporting development. They are increasingly being recognized as an effective tool not just to finance major infrastructure projects, but also to reduce poverty by supporting projects to expand food production and access to education, healthcare, clean energy, and financial services.
A new publication, Emerging Partnerships, lists two OPIC projects among its “Top 40” list of public-private partnerships in emerging markets. Emerging Partnerships was published by the International Finance Corporation and Infrastructure Journal. It recognized OPIC’s 2008 deal to provide financing and political risk insurance to ContourGlobal to support construction of a power plant in the African nation of Togo. As one of the smallest countries in Africa, Togo also has one of the lowest rates of per capita energy generation in the world.
The report also included OPIC’s 2007 deal to provide financing to an affiliate of AES Corp. to build the first independent power provider in Jordan. Both ContourGlobal and AES are U.S. businesses and both power plants served to deliver a more reliable source of electricity in regions where power supply was limited.
“International tenders, management agreements, and risk allocation methodologies may not come to mind when you think about reducing poverty,” the publishers of Emerging Partnerships said in an introduction to the publication, explaining the value of such sophisticated financial transactions. “But these are some of the tools behind public-private partnerships, or PPPs, which are becoming increasingly recognized as an effective way to finance and operate public services, including infrastructure, health, and education.”
Projects were nominated by governments, industry, NGOs, academia, and other organizations and were reviewed by independent judges who looked at a broad range of features, including the project’s level of financial and technological innovation, its developmental impact and its replicability. All projects considered were at least partly completed between January 2007 and June 2012.
OPIC, which partners with the private sector to promote development in a wide range of sectors from healthcare and agriculture to access to finance and infrastructure, has a long history of supporting energy projects. This support is based on the recognition that an adequate supply of power is key to improved quality of life and continued development. In recent years, the Agency has focused increasingly on supporting renewable energy projects. The ContourGlobal power project that OPIC supported in Togo uses an innovative design that enables the plant to run on a variety of fuels from low sulfur heavy fuel oil (HFO), as well as light fuel oil and natural gas.