THE Asian Development Bank (ADB) is extending a $100-million loan to help the Philippine government finance its project preparation requirements for the “Build, Build, Build” (BBB) infrastructure program.
In a briefing with select reporters on Monday, ADB Philippines Country Director Richard Bolt said the loan will be used for the Infrastructure Preparation and Innovation Facility (IPIF).
ADB said it is estimated that the IPIF will finance the feasibility studies, procurement of consultants, detailed engineering and preparing bid documents, among others, of at least 19 projects, as of press time.
“The $100-million infrastructure project innovation facility is ADB’s first technical-assistance loan to the Philippines. Previously, most of our assistance was smaller grants, we provide grant assistance of maybe $1 [million] to $1.5 million to help prepare any one project,” Bolt told reporters.
“The fact that the government is willing to go to this scale, I think, is a solid reflection of their understanding of the task that’s ahead of them,” he added.
The total cost of the facility is $164.06 million, with the government of the Philippines contributing $64.06 million. The project is expected to be completed in the second quarter of 2021.
The list of projects that the facility can finance is about $3.8 billion. However, the indicative list from the national government includes seven roads and bridges six water projects and six transportation projects.
Initially, the loan for the facility is good for five years, but the IPIF can receive additional loans from ADB depending on the implementation of the projects and the need for additional resources by the national government.
Also, while the facility is still limited to financing projects from the departments of Public Works and Highways (DPWH) and Transportation (DOTr), later on the use of the facility can be for other projects, such as those for agriculture, health and education.
“Anything is possible moving ahead. We’ll see how we go with this. If things go according to plan and so forth, the prospects for expanding to other sectors are good. Whether its through modifications of this facility moving ahead,” Bolt said.
PDMF vs IPIF
Bolt explained that ADB will be using its lessons learned from supporting the Project Development Monitoring Fund for public-private partnership projects. There are also similarities and differences between the PDMF and IPIF.
The ADB executive said the IPIF and PDMF are similar in the sense that they finance project preparation requirements, but the IPIF has a “wider coverage” than the PDMF, since it can finance requirements, including bidding documents.
The PDMF, the revolving fund supported by the ADB and Australian and Canadian governments, only covers the procurement of transactional advisers, consultants and prefeasibility studies.
Bolt said the IPIF provides a “good complement” to the PDMF in the sense that, while the fund helps public and private-sector projects, the facility directly aids in the development of
ADB Philippine Country Office Economist Aekapol Chongvilaivan said another difference between the fund and the facility is the ability it gives to the government to procure international firms as consultants for various BBB projects.
Chongvilaivan said some projects financed through the IPIF will require the expertise of international consultants because of the technical knowledge needed to implement them.