Project Development and Viability Gap Funds in Pakistan

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Client The World Bank
Dates 2010
Sector(s)International Infrastructure
Service(s)Policy & Economics, Strategy & Finance

CEPA advised the World Bank on the preparation and finalisation of a detailed operational plan for two funds to support infrastructure PPP projects in Pakistan:

  • The Project Development Fund (PDF), which provides resources to support early-stage development of PPPs through feasibility studies and other assessments, across a range of sectors. It also funds project structuring, negotiation and other later stage development of PPP projects.
  • The Viability Gap Fund (VGF), which provides resources to improve the viability of PPP projects that are regarded as economically justifiable, but otherwise ‘unbankable’ and challenging to finance.

In the first phase of the assignment we developed a project pipeline for PPP projects that require support from these funds. This included updating the work done by other institutions in the country and analysing funding requirements and possible funding sources.

The second phase focused on developing a business plan for the PDF and VGF. As part of this phase, we designed and implemented the funds’ institutional and organisational structure, as well as operating polices and management processes. Our team drew on its broad experience on infrastructure financing and project development to tailor the PDF and the VGF to the needs of the Pakistani Government and economy. The funds will help to ensure that projects are supported throughout the infrastructure project cycle as well as to provide additional financial support to projects of high economic value that might otherwise not be developed.

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