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Home > Privatization Alert - March 2010
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Privatization Alert - March 2010
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Focus: Investment in public-private infrastructure projects rebounded in 2009
A recent note published by the Public-Private Infrastructure Advisory Facility, reported that investment commitments in infrastructure projects with private participation (PPI projects) in developing countries increased by 22 percent in the third quarter of 2009. For the first three quarters of 2009 the increase was 10 percent, compared with the same period in 2008. Obtaining financing remained difficult, with PPI projects backed by large developers with good relationships with financial institutions, or projects which have been accorded priority status by their countries, accessing it more easily. Local public banks, as well as bilateral and multilateral agencies, continue to be the key sources of finance for PPI projects in the developing world.
Investment in PPI projects in developing countries was concentrated in Brazil, India and Turkey. Together these countries accounted for 78 percent of all investment commitments, and for 100 percent of the growth in such investment during the third quarter of 2009. Russia saw a sharp decline in investment commitments because of the financial crisis and the coming to an end of the privatization program for RAO UESR, an energy company. If Brazil, India, Turkey and Russia are excluded from the data, investment in developing countries would have fallen by 49 percent in the third quarter of 2009, and by 5 percent in the first three quarters of that year, compared with the same periods of 2008.
Large PPI projects (of US$1 billion or more) were the principal drivers of investment growth in the first three quarters of 2009. Investment in large PPI projects increased by 40 percent during that period. For PPI projects between US$500 million and US$1 billion, investment increased by 100 percent in the first three quarters of 2009. However, investment in projects of less than US$500 million declined by 30 percent.
Status and upcoming transactions
Europe and Central Asia:
Hungary's Ministry of Finance has announced the re-nationalization of the airline Malev, because its privatization has not been successful. Turkey's Privatization Administration has reported that it has received more than 100 offers for the privatization sale of 52 hydroelectric power plants. Bulgaria is planning to sell on the stock exchange the shares of 40 companies; the price of the state’s minority share in 12 of these companies is to be reduced by 30 percent.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
Sub-Saharan Africa:
Nigeria's state-owned oil company, Nigerian National Petroleum Corporation, is moving towards being privatized. Nigeria’s National Council on Privatization has also set up a committee that will undertake additional due diligence on prospective investors who submitted bids for Nitel and M-Tel. Three binding offers have been received in Zambia's Zamtel privatization. Uganda is ready to issue an international tender for Kilembe Copper Mines, slated for privatization.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
East and South East Asia: China has approved the formation of a new asset management company to oversee the privatization of its state-owned companies.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
North Africa and the Middle East:
Kuwait has announced that its new privatization law is almost complete. Saudi Arabia's privatization of Saudi Arabian Airlines is progressing as initially planned.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
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