The Power Purchase Agreement (PPA) is the central contract for any independent power generation project, but can be especially critical in emerging markets. Although a prerequisite to the success of a power project, the PPA is only one aspect of a power sector transaction. Prior to any attempt to attract capital to a country, the host government and offtaker should work towards creating an enabling environment.
Risk allocation is an essential component of a successful public-private partnership contract. For many of these projects, demand risk is large and mostly exogenous, which motivates considering contract designs that do not force the concessionaire to bear risk it cannot manage. In this paper we study present-valueof-revenue (PVR) contracts, which achieve this objective. Under a PVR contract, the regulator sets the discount rate and tariff schedule and frms compete on the present value of tariff revenue.
Public-Private Partnerships (PPPs) harness both the public and the private sector to provide goods and services conventionally supplied by the public sector, while easing the tight budget constraints on public spending. We found that despite PPPs have the potential to achieve faster policy implementation and ensure good maintenance standards, the audited projects were not always effectively managed and did not provide adequate value for money.
The Progression Matrix is a tool that helps companies adopt the Technology Code of Conduct—a framework designed for IFC clients engaged in technology-intensive projects (see EM Compass Note 80). In this addendum to Note 80, the Matrix identifies technical and business practices that help companies put principles of sustainable technology into practice in a way consistent with their stage of financing and maturity, including emerging, later-stage, and mature companies.
The adoption and diffusion of artificial intelligence and other disruptive technologies will play an important role in market creation and growth. Development finance institutions have a role to play in leveraging their investments to ensure that these technologies sustain both growth and development objectives. To this end, the authors propose adoption of a Technology Code of Conduct as a framework, supported by a set of practical tools for its operationalization, to assist IFC’s clients engaged in technology intensive projects.
This manual describes the task that an economic regulator should undertake when revising the price control for a regulated company. The aim of regulation is to protect consumers, while ensuring that the company remains viable and has an incentive to operate efficiently. After an introduction in section 1, section 2 discusses the basic principle of price control regulation.
The key conclusions of the work are as follows:
The infrastructure sector today faces a complex landscape of global risks. The 2020 Global Risks Report (GRR), an annual report published by the World Economic Forum with support from Marsh & McLennan, warns of a chronically unsettled global landscape – one that businesses cannot expect will ‘snap back’ to its old normal.
The World Bank has decades of experience supporting countries where coal mines and power plants are closing, wherever they are in the transition process. This includes looking at the interdependencies between the decommissioning of coal assets—such as mining, transport, and power plants—and developing renewable energy programs to take their place. Since 1995, we have provided more than $3 billion to support governments close coal mines and power plants and ensure a Just Transition that safeguards jobs and income in affected communities.
The pandemic has the potential to change the priority of government policies and budgets, developers’ investment decisions and the availability of financing through 2025. This casts a great deal of uncertainty on a market that had been expanding at a rapid pace in the previous five years.