ISLAMABAD: Pakistan has been grouped in top five highest private participation investment (PPI) countries owing to a few multi-billion-dollar power projects, with two hydropower plants worth $3.6 billion during the first half of 2017.

A half year update on private participation in infrastructure (PPI) published by the World Bank on Friday says that Indonesia was the destination for the highest amount of PPI investment, while Pakistan and Jordan were new entrants to the top five countries, joining Indonesia, Brazil and China. Indonesia, Pakistan and Jordan are amongst the top five highest PPI investment countries.

South Asia’s 17 per cent share of first half of 2017 global PPI investment may mark the reversal of a regional trend of declining shares of global investment, which reached a low of 4pc in 2015.

In the first half of 2017, investment in South Asia has already reached the full-year 2016 level, driven by the financial closure of two power megaprojects in Pakistan - the Suki Kinari hydropower plant worth $1.9bn and the Karot hydropower plant worth $1.7bn.

The report says that the energy sector received the largest amount of global investments, accounting for almost three-quarters of global investment during Jan-Jun 2017, while transport accounted for 24pc. Water and sewage accounted for only 3pc.

83pc of the electricity generation projects were in renewables (68 out of 82 projects). By investment value, however, renewable energy projects captured only 50pc of total electricity generation investment (compared to 60pc in 2016, and 65pc in 2015), with $11.9bn.

The report says that PPI investments during first half of 2017 totaled $36.7bn across 132 projects showing an increase of 24pc over investments in the first half of 2016, but still significantly lower than historical levels for first half year.

The total investment recorded for first half of 2017 is 15pc lower than the past five years’ first half average investment level of $43.2bn.

In first half of 2017, green-field projects accounted for more than two-thirds of the total investment commitment, or $24.9bn, while brown-field projects accounted for the remaining 32pc, with $11.8bn.

There was only one management contract of $7m for a water project in China; no divestiture transactions were recorded.

The number of divestitures has been declining over time with only three recorded in full-year 2015, but in full-year 2016 there was a slight revival recorded with seven divestitures.

Among green-field projects in first half of 2017, projects adopting a build, operate, and transfer (BOT) model account for $14.2bn of investments, followed by build, own and operate (BOO) model projects, with investments of $8.9bn.

Published in Dawn, October 21st, 2017