Proceedings of the 12th Meeting of the COMCEC
Financial Cooperation Working Group
Infrastructure Policy Framework:
The enormity of investments and the long-term
nature of infrastructure financing require appropriate policies and capabilities for
implementation. A lack of a list of bankable pipelines of infrastructure projects in many
countries makes it difficult to estimate demand and needs. The policies and plans
would prioritize between different projects of national importance.
Legal and Regulatory Framework:
Prof. AHMED identified three types of enabling
laws to promote infrastructure financing. First, PPP and concession laws that would
provide legal basis and clarity for private sector involvement. Second, since different
infrastructure sectors are have unique features, there is a need for sectorial specific
laws and regulations. Finally, Islamic financial laws to support operations of Islamic
banking, nonbank financial institutions and Islamic capital markets.
Institutional Arrangements for Procurement Processes & Procedures:
then discussed the procurement frameworks by identifying World Bank’s
three key elements of PPP procurement regimes. Preparation relates to selection of
PPPs and would depend on the priorities identified in an integrated infrastructure
plan. Procurement deals with processes of bids, evaluation and award of contracts.
Finally, contract management phase tracks progress, completion, and contract
implementation after the completion of the PPP project.
Project Related Factors:
A key issue from a private sector’s perspective is the
bankability of projects which relates to adequate cash flows to repay the investors.
Since infrastructure projects are complex and long-term, investors are careful to
assess the risks of variation of cash flow and ensure that they remain within the
Structuring financial contracts for infrastructure projects is
complicated and requires not only financial expertise but also an understanding of the
project’s features along with the knowledge on risks and return. A key constraint is the
lack of professionals with the knowledge and experience of structuring and financing
large infrastructure projects.
After providing the background of infrastructure and the role of private sector in contributing
to its development, Prof. AHMED discussed the methodology used in the research. He pointed
out that the research was descriptive and evaluative and arranged, summarized and presented
data/information to enable meaningful interpretation. The research analyzed both
quantitative and qualitative data with the former including examining size and status of the
infrastructure financing needs and the status of Islamic financial sector in different
jurisdictions. He continued that some analyses are qualitative and conceptual in nature and
information for them were collected using content analyses of various sources which included
relevant literature, surveys of countries, policy documents from international organizations
and standard setting bodies, national level public policy and legal/regulatory documents, etc.
Case studies on different countries were carried out by principal investigator and country level
specialists. The information was gathered from national level public policy and
legal/regulatory documents and meetings and interviews with key stakeholders (policy
makers, industry players, regulators).
In the second part of the presentation, Prof. AHMED started by presenting the status of overall
infrastructure, transport, electricity and telephony infrastructure of OIC member countries and
other regions. While the status of the infrastructure sectors for OIC member countries is better
than Sub-Saharan Africa and South Asian regions, their status is lower compared to other four