| Energy |
|
|
|
|
Private activity in energy showed mixed results in 2008, according to data from the Private Participation in Infrastructure Project Database. Although investment commitments to energy projects with private participation were down, they remained strong—at the third highest level in 1990–2008. Activity in the first half of 2008 kept investment at a high level for the year. Investment slowed in the second half with the full onset of the financial crisis. The slowdown in the second half also led to a decline in the number of projects for the year. In 2008, 86 energy projects with private participation reached financial or contractual closure in 23 low- and middle-income countries.1 These involve investment commitmentsof US$37.2 billion. Energy projects implemented in previous years had additional commitments of US$10.39 billion, bringing total investment in 2008 to US$47.5 billion. That represents a drop of 7% from the level reported in 2007. Lower payments to governments (such as concession or lease fees and divestiture revenues) account for the decline. By contrast, investment in physical assets, which amounted to US$38.7 billion in 2008, was up 6% from that reported in 2007. After growing for three consecutive years, the number of projects reaching financial or contractual closure declined by 22% in 2008 compared with 2007. The closure of larger projects explains the divergence in trends between investment and number of projects. Large projects (US$1 billion or more) account for most of the investment growth in 2007 and 2008. With these projects excluded, investment grew from US$14.7 billion in 2006 to US$17.4 billion in 2007, then fell to US$13.4 billion in 2008. The average project size grew from US$120 million in 2004 to US$435 million in 2008, while the median rose from US$34 million to US$152 million. |
