PPP Trends in Ethiopia on Right Track: World Bank Expert

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Addis Ababa January 25/2019 Ethiopia`s recent strategic direction of public-private partnership (PPP), which the government has opened up to the global market for financial sustainability, is in a “positive” track, according to the World Bank expert.

Over the past couple of decades, Ethiopia has followed an economic model, which predominantly focused on public investment in infrastructural development.

In an exclusive interview with ENA, Rahul Kichlu, Senior Energy Specialist at World Bank Ethiopia said despite its successful economic model, the government has now realized that there are limits for that type of investment it can shoulder.

“So, what’s government trying to do now is to bringing the private sector investment in specific sectors of the economy   to ensure financial sustainability,” Rahul stated.

“This is a very positive trend that the government is opening up to the global market place by inviting public-private participation. In terms of the overall approaches and trends that the government is taken, we are very happy that are following international best practices. The first step in this whole process was establishment of the PPP proclamation in January of 2018. Starting from that government has been very focused on establishing predictable legal and regulatory environment for public private participation,”Rahul said.

Predictable legal and regulatory environment for public-private participation is extremely essential for new investors who are coming in the country, he affirmed.

Establishment of a PPP board and transparent tendering for these projects, offer a lot of certainty for foreign investors to come and invest in the country, according to Rahul.

The International bid for the construction of six mega solar projects costing about 800 million USD is going to be issued soon, recent reports indicated.

The total projects to be constructed by Public-Private Partnership (PPP) are reportedly 16 and bids have been prepared for the six mega solar projects.

The World Bank has been supporting the public-private partnership initiative as well as the overall economic reform program, it was indicated

“From the World Bank side, we have been very much supporting the public-private partnership initiative as well as the overall economic reform program. This is a multi facilitative approach where by provide policy advice, technical assistance, targeted financing and perhaps even guarantees as well.”

Joseph Atta-Mensah, Principal Policy Adviser, at the UNECA said infrastructure is a means to an end. The end game is to ensure Ethiopia is able to have some standard of living.

“The infrastructure which provides the linkages to the rural areas to get the Tef, to be able to harness the Tef and added value to it, package it in a way that when you walk in shopping center in either Dubai or in New York, you say wow this package is from Ethiopia and marketing is key in terms of value addition. So, the end game is to make the Tef attractive for people to buy.”

“So, this infrastructure that we are talking about is massive. Therefore, PPP is crucial. So we need to have the right and enabling environment that would make it attractive for partners,” Joseph further stated.

For the economist, reforming the financial sector, in way that would attract the private sector which comes in with equity to do this, PPP arrangement is also crucial. 

Ethiopia has opened up a solid opportunity to promote PPP as a major component of the national reform program in the economic sector. South Africa and Nigeria were mentioned as the best PPP practices in the African region.

Ethiopian News Agency
2023