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In 2008 nine low- or middle-income countries implemented at least 65 water projects with private participation, involving investment of more than US$3.1 billion, according to just-released data from the Private Participation in Infrastructure Project Database. The number of new projects involving the private sector declined by 20% compared with the peak of 2007, while annual investment commitments fell by 12%.2
New private activity was highly concentrated in 2008. The number of developing countries implementing new private water projects was the lowest since 1995. Even more, three of the nine—China, Brazil, and Algeria—accounted for 89% of new projects and 85% of investment. China alone accounted for 71% of new projects and 31% of investment. As in the previous three years, private activity in 2008 focused mainly on water and sewage treatment plants.
The 65 new water projects included 42 build-operate-transfer contracts, 16 concessions, 3 management contracts, 2 divestitures, and 2 lease contracts. The number of concessions was down sharply from the 25 in 2007, while the number of BOT contracts remained stable (43 were implemented in 2007).
The 2008 data suggest that the global financial and economic crisis has affected the closure of new water projects. In the second semester of 2008, the first months of full-scale financial crisis, the number of projects reaching closure declined by 45%, and the associated investments by 29%, compared with the same period in 2007 . Annual activity in 2008 declined by a smaller rate, however, thanks to higher activity in the first semester that offset some of the slowdown in the second.
This information is drawn from the Private Participation in Infrastructure Project Database, a joint initiative of PPIAF and the World Bank. For a full report click here. For more about PPIAF’s activities in this sector, click here.
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