Methodology

• The database records contractual arrangements with and without investments in which private parties assume operating risks in low- and middle-income countries (as classified by the World Bank).
• Projects included in the database do not have to be entirely privately owned, financed or operated. Some have public participation as well.
• With few exceptions, the investment amounts in the database represent the total investment commitments entered into by the project entity at the beginning of the project (at contract signature or financial closure), not the planned or executed annual investments.
• For projects that involve investments, the database figures reflect total project investments encompassing the shares attributable to both the private and the public parties.
• A breakdown by financing sources is not provided. The database does not provide data on funding flows coming as debt from private sources.
• The database draws its information exclusively from publicly available sources. This enables us to make the results publicly available, but carries the risk of inaccuracy depending on the reliability of sources used.

• energy
• electricity generation, transmission, and distribution
• natural gas transmission and distribution
• telecommunications
• fixed or mobile local telephony
• domestic long-distance telephony
• international long-distance telephony
• transport
• airport runways and terminals
• railways (including fixed assets, freight, intercity passenger, and local passenger)
• toll roads, bridges, highways, and tunnels
• port infrastructure, superstructures, terminals, and channels
• water
• potable water generation and distribution
• sewerage collection and treatment

• Projects that are owned or managed by private companies in low- and middle-income countries. Private parties have at least a 25% participation in the project contract, except for divestitures which are included with at least 5% of equity owned by private parties.
• Projects that directly or indirectly serve the public -- captive facilities (such as cogeneration power plants and private telecommunications networks) are excluded unless a significant share of output (20%) is sold to serve the public under a contract with a utility.
• Projects that reached financial closure after 1983 (database coverage currently extends to 2011).

• management and lease contracts
• concessions (or management and operation contracts with major private capital commitments)
• greenfield projects
• divestitures

• For management and lease contracts, a contract authorizing the commencement of management or lease service must be signed with the private consortium assuming the operation of the services.
• For concession projects, contractual closure is reached when the concession agreement is signed, and the date for taking over the operations is set.
• For greenfield projects, financial closure is defined as the existence of a legally binding commitment of equity holders and/or debt financiers to provide or mobilize funding for the full cost of the project. In some cases project construction begins with partial funding. Such projects are included in the database when there is a significant advancement of project construction (25%).
• For divestitures, the equity holders must have a legally binding commitment to acquire the assets of the facility. Such commitment usually occurs at the signing of the share purchase contract.

• Investments in physical assets: resources the project company commits to invest in expanding and modernizing facilities. Total cost of developing or expanding the facility during the contract period is entered as investment data in the year of financial or contractual closure (for which data are typically available). For agreed further expansions (e.g. additional power plants) under the same contract, the investment commitments involved in the expansion are recorded in the year the expansion was agreed. Finally investment commitments for rental projects do not include the total asset cost. Instead, they are recorded in an amount which is proportional to the ratio of project’s contract period over the asset’s expected life.

  There are exceptions to commitment bases which are telecommunications and some large energy utilities controlled by private parties. For these projects, annual investments on facility expansion and modernization are entered as investment data in the year of investment when information is publicly available. The database uses two criteria to identify telecommunications and energy companies controlled by private parties which are: (i) private parties own at least 50% of equity stake (or voting shares) in the company, or (ii) private parties own less than 50% of equity stake but were granted the operational control of the company.

• Payments to the government: to acquire state-owned enterprises or rights to provide services in a specific area or to use radio spectrum. Those expenditures are usually paid through divestiture revenues, license or concession fees, or lease payments. Where divestitures are phased (such as for large privatized electricity and telecommunications companies), the investments are recorded in the years in which the transactions take place. Where investments in acquiring government assets are due over the period of a concession, an estimate of their present value is recorded in the year of financial or contractual closure.

• under construction for facilities that are still being built
• operational projects that have started providing services to the public
• concluded projects for which the contract period has expired and was neither renewed nor extended by either the government or the operator
• canceled projects from which the private sector has exited in one of the following ways:
  • selling or transferring its economic interest back to the government before fulfilling the contract terms
  • removing all management and personnel from the concern
  • ceasing operation, service provision, or construction for 15 percent or more of the license or concession period, following the revocation of the license or repudiation of the contract
• distressed projects where the government or the operator has either requested contract termination or are in international arbitration.
• merged projects that have been acquired by other projects in the database and consolidated in one project.

• commercial news databases such as Factiva, Business News America, ISI Emerging markets, and the Economist Intelligence Unit’s databases
• specialized and industry publications such as Thomson Financial’s Project Finance International, Euromoney’s Project Finance, Media Analytics’ Global Water Intelligence, Pisent Masons’ Water Yearbooks, and Platt’s Power in Asia
• specialist portal such as Privatization, IPAnet, and Privatization Barometer
• Internet resources such as web sites of project companies, privatization or PPP agencies, and regulatory agencies
• sponsor information primarily through their Web sites, annual reports, press releases, and financial reports such as 10K and 20F forms submitted to the NYSE
• multilateral development agencies primarily through information on their Websites, annual reports, and other studies

• project companies
• sponsors
• regulatory agencies

Project size: The database does not have good coverage of small scale providers due to lack of publicly available information. Those projects are usually not reported in major news sources, databases, government sites or other sources used by the database. This limitation is particularly important to note in water and electricity services where small scale providers play an important role. There are other PPIAF funded initiatives available to map and profile these types of operators.

Investment in telecommunications: The database tends to underestimate telecommunications investments in facilities due to data gathering problems. The database relies on publicly available information. However, many telecommunications operators, particularly the non-publicly traded ones, do not release investment data. In those cases, the database either does not include their investments or uses partial information provided by news reports.

Distressed projects: The database tends to underestimate international arbitration cases because most arbitration bodies do not disclose information about cases. International Centre for Settlement of Investment Disputes (ICSID) is the only international arbitration body that provides public information on its cases. Even when information on international arbitration cases is public, it can be difficult to find out which projects are under arbitration because private sponsors rather than project companies are usually the claimants.

Accuracy of sources: The database relies primarily on information reported in public sources which may not be accurate or contain all the required information. For instance, different public sources report different investment commitments for some projects. In these cases, the database reports the investment figures which seem to be the most accurate. Other projects are reported without any indication of investment commitments or very limited information on contractual obligations. When unable to obtain more information, these projects are included in the database with the limited information available.