|Client||Private Infrastructure Development Group (PIDG)|
|Service(s)||Policy & Economics, Strategy & Finance|
CEPA provided advice to the Private Infrastructure Development Group (PIDG) on the development and implementation of a project development and financing facility – InfraCo Asia.
InfraCo Asia is a project development company and acts as a principal developer, taking on upfront costs and risks in the early stages of project development. It focuses on poorer countries of South and South East Asia. As well as providing development expertise, it contributes equity and quasi-equity investments for projects at an early stage. Once the development of the project is sufficiently advanced and risks are lowered for subsequent investors, InfraCo Asia raises the debt and equity capital needed to implement the projects and sells all or part of its stake in its projects.
We advised on the design and implementation of this facility through several stages:
- In the first stage of the project, we carried out due diligence on the market need, market dimension, sponsor characteristics, extent of the financing gap in pro-poor infrastructure projects in Asia, and the most appropriate financing concept. A review of the policy environment, including supportive and constraining features was a key aspect of this work.
- In the second stage, our team worked on the definition of the facility itself, including its size, likely funding sources, lending criteria, credit and risk assessment, portfolio classification and management, disclosure rules, governance, administrative and control aspects, location and management. This design stage involved a detailed consideration of a suitable structure for the facility that would respond to the policy environment and infrastructure/ growth needs of the region.
- In the third stage, we assisted PIDG in: (i) conducting due diligence trips to South East Asia and South Asia that aimed to re-assess the market need and opportunities for InfraCo in the region; and (ii) drafting a business plan for InfraCo Asia that was approved by shareholders in early 2008. The business plan covered the country and project focus for the facility, management approach, funding requirements and cash flow projections, governance and structure, as well as an implementation plan for the setting up of the facility.
- In the final stage, we worked on the formal establishment of the facility, including establishment and procurement of the management company. We also drafted the tender documents for the procurement of the management company.
InfraCo Asia is currently operational and has started to finance the development PPP projects in the region.