WB willing to fund infra projects in RP

The World Bank has expressed willingness to provide financial and technical support to infrastructure projects of the Philippine government.

The World Bank particularly cited the Philippine Infrastructure Corp. (PIC), a subsidiary of the National Development Co., which has been set up to help prepare projects for private sector participation and coordinate with the different public agencies involved.

On a "very preliminary basis," the World Bank said it is prepared to support two promising projects of the PIC – the Calabarzon Expressway and the Lakeshore Expressway.

Such support would include project preparation and a combination of instruments such as an International Finance Corp. (IFC) loan to, or equity participation in, a project company, or a World Bank loan or guarantee – to provide financial support to the projects if needed.

In an aide memoire obtained by The STAR, the World Bank noted that the Arroyo government has taken "important steps" to improve the business climate for private sector participation in infrastructure."

Likewise, the World Bank noted "some ambitious sector reforms are being implemented (particularly in the power sector) and there appears to be strong political will to ensure that a few long-delayed priority transactions move forward."

The World Bank noted that "the PIC could, over time, become a center for excellence in project preparation and that it could also play a very useful role in helping coordinate between public agencies."

In addition, the World Bank said the decision that projects prepared by, or with the help of PIC will be awarded to private operators through competitive bidding "sends a strong and positive signal to all interested parties."

However, the World Bank stressed that "it is important that PIC establish its credibility both vis-à-vis sector agencies and, most importantly, vis-à-vis potential private investors."

This would involve clear allocation of responsibilities between PIC and sector agencies, progressive strengthening of PIC’s experience and capabilities and thorough preparation of some of the potential projects "to maximize the probability of positive responses from the private sector."