The Road to the SDGs

to set up the vehicle (operational expenses) and to prepare the selected projects (from feasibility study to tendering stage). X In the span of 1-2 years, the CP conducts the necessary studies to structure bankable projects with the help of consulting firms. The objective is to de-risk the projects and provide the MC in question with a proposed risk distribution structure that ensures value for money for the public partner and bankability for the private partner. ACHIEVEMENTS X IsDB engaged with 12 countries in 2019 and 2020 with the objective of implementing CPs in Gabon, Indonesia, Morocco, Turkey, Kuwait, Saudi Arabia, Senegal, Niger, Tunisia, Maldives, Guinea and Afghanistan. X The CP mechanism is currently under implementation and/or discussions with MCs, as follows: – Afghanistan — The CP model was adapted to support the Afghanistan Self-Reliance Acceleration Package; discussions are ongoing with other development partners active in the country – Gabon — The CP was established in October 2020 and operations are expected to start in the second half of 2021 with a sourced pipeline of projects in the transportation and energy sector for an expected total financing amount of US$ 2.1 billion – Indonesia — It was agreed to focus on the automotive and agribusiness industries; the CP is currently reviewed by the Government to provide recommendations on regulatory and finance issues – Maldives — Preliminary analysis of Maldives investment climate and private sector development was conducted, identifying challenges and bottlenecks hindering private investment; new MCPS financing model was agreed through the CP for the tourism and fishery industries – Morocco — It was agreed to develop the MCPS with a focus on agribusiness; discussions are continuing with the ITHMAR sovereign wealth fund to identify the potential for cooperation on CP entity – Niger — MoU was signed to leverage the CP mechanism; modalities of implementation to be determined once the GVC projects have been identified – Nigeria — The CP model was met with interest by Government; it was agreed to take the discussions forward in the context of the MCPS – Senegal — MoU was signed to start CP implementation with projects focusing on the energy and agriculture sectors; CP discussion and implementation to be coordinated with the Senegal sovereign wealth fund (FONSIS) – Turkey — The CP model was presented to the Government, followed by a technical discussion with the Turkish Development Bank as a key partner to take the model into the implementation phase. INVESTMENT X The CP investment in project preparation and development features a cost-recovery arrangement with the MC’s government, whereby projects reaching financial close will see the CP investment transform into a stake in the underlying projects’ special purpose vehicles. X As projects gradually mature to the tender stage and financial close, project-level funding will be sourced by tapping into the global infrastructure investors at the relevant risk-return profile (equity, hybrid, fixed income). X If necessary, the CP will have the capacity to raise funds by issuing capital market instruments (Sukuk) in local or international capital markets. X Once all construction-related risks expire, the CP will have the capacity to recycle its capital through the sale of the reduced-risk assets. IsDB will design tailored distribution packages adapted to the appetite of institutional investors which can hold long-term assets in their portfolio. X The CP oversees implementation of the portfolio until all repayments are completed and will incorporate knowledge transfer and skills development components to ensure that lasting effect is achieved in MCs in terms of project preparation and funding. X IsDB is allocating 20–40% of its annual financing capacity as seed funding to launch the CP model, and will gradually double it at a steady pace. C P G A B O N CP Gabon has been operational since October 2020 and is building a US$2.1 billion strategic infrastructure portfolio to upgrade the wood and manganese value chains [ 233 ] T H E R O A D T O T H E S D G s | P R O G R E S S A N D A C H I E V E M E N T S