PPP investments in India at a 10-year low in 2015: World Bank

14 June 2016

India registered a 10-year low in public-private investments in the year 2015, as South Asian investments tumbled 80 per cent to 5.6 billion, adding to contraction in global investment to a low of $111.6 billion, the World Bank has said.

In its latest annual report, the World Bank said global investments in 2015 decreased to $111.6 billion, below the five-year average of $124.1 billion from 2010 to 2014.

"This contraction resulted from lower investments in Brazil, China and India," the Bank said in its latest report on Private Participation in Infrastructure Database.

"India recorded a 10-year low in investments, as only six road projects - usually a rich source of PPI over the past 10 years- reached financial closure," the World Bank said.

In South Asia, there were 43 deals for a combined total of $5.6 billion that closed in the region, representing 5 per cent of the total investment - a decline of 82 per cent from the five-year average of $30.5 billion.

"Consistent with historical trends, India generated a majority of the projects (36 out of 43); Pakistan had four; Nepal, two; and Bangladesh, one. Notably, 26 of the 36 projects in India, amounting to $2.0 billion, targeted renewable energy, while all of Pakistan's projects, totalling $749.9 million, solely focused on renewables," the Bank said.

Solar energy investments climbed 72 per cent compared to the last five year average, while renewables attracted nearly two-thirds of investments with private participation, it said.

Global private infrastructure investment in 2015 mostly remained steady at $111.6 billion when compared to the previous year, it said.

Among the most notable, commitments in Brazil were only $4.5 billion in 2015 - a sharp decline from $47.2 billion the previous year, reversing a trend of growing investments, it said.

"Investment in China also fell significantly below its 5-, 10-, and 20-year averages, as the average transaction dropped to $63 million," it said.

By number of projects, however, these three countries accounted for 131 of the 300 global deals, or 44 per cent of all projects.

Still their combined investment of $11.6 billion only made up 10 per cent of the global total, compared with 54 per cent in 2014, which was also the annual average over the previous four years.

According to the World Bank, global private infrastructure investment in 2015, though on par with the previous year, was 10 per cent lower than the previous five-year average because of dwindling commitments in China, Brazil, and India.

"The data finds that investments in other emerging economies increased rapidly to $99.9 billion, representing a 92 per cent year-over-year increase," said Clive Harris, Practice Manager, Public-Private Partnerships, World Bank Group.

Meanwhile, the World Bank has downgraded its 2016 global growth forecast to 2.4 per cent from the 2.9 per cent projected in January. The move is due to sluggish growth in advanced economies, stubbornly low commodity prices, weak global trade, and diminishing capital flows.

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