Changes were made to the PPI methodology in H1 2016. See summary of these changes (PDF)

What does the PPI Database record?

  • The database records contractual arrangements for public infrastructure projects in low- and middle-income countries (as classified by the World Bank) that have reached financial closure, in which private parties assume operating risks.
  • 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.
  • 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.
The database methodology is described in more detail below.
Countries included in the database
  • The database covers projects awarded in low- and middle-income countries as classified by the World Bank. The countries are reviewed every 5 years in order to maintain continuity in the data. The next time the countries will be updated will be in 2016.
  • Countries are also classified in six regions (East Asia and the Pacific, Europe and Central Asia, Latin America and the Caribbean, the Middle East and North Africa, South Asia, and Sub-Saharan Africa).
Sectors and subsectors included in the database
The database focuses on sectors in infrastructure with high capital costs, which were traditionally provided by the public sector, and which continue to serve the public. These sectors are:
  • energy
    • electricity generation, transmission, and distribution
    • natural gas transmission and distribution
  • information and communications technology
    • ICT (including land based and submarine cables)
  • 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 included in the database
The database covers infrastructure projects that meet three criteria:
  • Projects that are owned or managed by private companies in low- and middle-income countries. Private parties have at least a 20% 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 ICT 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 H1 2016).
Types of private participation included in the database
Projects are considered to have private participation if a private company or investor bears a share of the project's operating risk. That is, a private sponsor is at least partially responsible for operating cost and associated risks. This could be by either having the rights to operate alone or in association with a public entity or owning an equity share in the project.

The Database classifies private infrastructure projects in four categories: Most infrastructure projects with private participation fit in one of these four categories. But the boundaries between these categories are not always clear, and some projects have features of more than one category. In these cases projects have been classified in the category that better reflects the risk borne by the private sector.

Management and lease contracts transfer at least partially the operational risk to a private sponsor through contractual obligations. In greenfield/brownfield projects and divestitures, the operational risk is transferred to a private party through contractual obligations and/or equity ownership in the project.

A private sponsor is a company controlled and majority owned by private parties. State-owned enterprises or their subsidiaries are considered private investors only in projects located in foreign countries. Partially divested state-owned enterprises or their subsidiaries that remain majority owned by government entities are not considered private sponsors in their own countries.
Stage at which projects are included projects in the database
The Database only includes projects that have reached financial or contractual closure. The definition of financial or contractual closure varies among types of private participation as a result of availability of public information:
  • 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 brownfieldconcession 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 the date that whereby a) there is 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; and b) the conditions for funding have been met and the first tranche of funding is mobilized. If this information is not available, construction start date is used as an estimated financial closure date.
  • 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.
Type of data included in the database
The database records, amongst other data points: the basic project information (location, project name, project company name, sector and subsector, type of PPI), the sponsors and their equity shares/commitments, any direct and indirect government support, debt providers and amount of debt, multilateral and bilateral support, award type and bid criteria, government level of the contracting authority, and revenue sources.
Recording investment commitments
Investments recorded by the database are those made or to be made by the project company under the PPI contract. In many cases project companies are owned by both private and public parties. Therefore the database does not record private investment alone. Investments are recorded in millions of US dollars in either the year of financial closure or year of investment as indicated below. Notes and other data analysis formats which uses previous years’ data takes the data in real terms adjusted by the World consumer price index.

Investments are classified as one of two types:
  • Investments in physical assets: resources the project company commits to invest in expanding and modernizing facilities. The 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.

  • 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.
If investment commitments change during the contract period due to contract renegotiation, they are adjusted in the database accordingly when information is publicly available. If revised investment commitments are not made publicly available, original investments are kept in the database.
Project status
The status of projects in the database can be one of the following options:
  • active for projects that are under construction (or about to start construction) or operational
  • concluded 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.
Project information and updates
The database is updated every half year through a comprehensive review of activity in each of the low- and middle-income economies. When new information on existing projects is available, project records are updated accordingly. The data for each half year is typically available within 6 months of the end of the relevant period.
Sources of information
The database’s research team uses the following sources:
  • 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
  • government websites and reports
  • 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
If necessary, information is also requested from or verified with:
  • project companies
  • sponsors
  • regulatory agencies
Interpretation of data
The PPI Projects Database is quite extensive and provides a good proxy for measuring trends. But the following data characteristics should be taken into account when presenting and interpreting data from the database:

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.

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.

Given data characteristics, the database does not provide an exhaustive listing of each and every infrastructure project with private participation in every developing country or a precise estimate of investments. It is very likely that some projects have been missed and investment figures are rough estimates. Rather, the objective is to provide access to detailed and aggregated data that can serve as the basis for estimates and analyses of private participation in infrastructure and its trends by country, region, and sector.