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Bridging Financing Gaps in Bhutan: PPP an alternative tool
PPP Unit
Department of Macroeconomic Affairs
Ministry of Finance
Date: 11th Dec,2018
Outline
Current Status: Economic & Resource
Bridging Financing Gaps : Alternative financing options
How PPP can help bridge the financing gap?
Challenges
PPP & SDG
Particulars 11 FYP Revised Estimate
12 FYP Projection % Change
Revenue & Grants 196,132 268,978 37 %
Domestic Revenue 127,025 214,563 69%
Grants 68,470 54,415 ‐20 %
Outlay 218,158 292,425 34%
Total Expenditure 215,793 292,425 36%
Current 105,927 177,100 67%
Capital 109,866 115,324 5%
Fiscal Balance ‐22,026 ‐23,447
1730 18101970
21502290 2300 2330 2340
25102720
0
500
1000
1500
2000
2500
3000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
GNI per capita, Atlas method (current US$)
Source: WDI 2018, WB
Source : https://rtm.gnhc.gov.bt/wp‐content/uploads/2017/03/Socio‐Eco‐Presentation‐10‐March.pdf
Preliminary Fiscal Projections (In Nu. Millions)
Current status : Economic & Resource
Bridging Financing Gaps : Alternative financing options
Sustainable economic development:
• Approved Economic Development Policy 2016
FDI
Public Debt Policy.
Fiscal Incentives 2016 .
External commercial borrowing guideline
in place
Public Private Partnership (PPP) Policy.
How PPP can help bridge the Financing Gap
Globally : Annual infrastructure gap of $1 trillion to $1.5 trillion in developing countries.
Bhutan experiencing an increase in capital expenditure over the years ( Capital exp. 12 FYP ‐5%)
To bridge the gap: PPP is recognized as an alternative tool/ mechanism for infrastructure financing:
‐ A part of AAAA, endorsed by the UN General Assembly of 27th July 2015.
PPP promoted as one of the key strategy for achieving sustainable socio‐economic growth in Bhutan:
PPP Policy 2016 adopted:main objective to have a sustainable PPP market in Bhutan.
PPP Unit created under the MoF (2016)
PPP Rules and Regulations 2017 formulated.
PPP project pipeline
PPP pilot project
PPP Project lists
# Project Name Implementing Agency
1 Development of Neighborhood Nodes
Thimphu Thromde
(Municipal Corporation)
2 Thimphu Integrated Bus Terminal
3 Stock exchange cum intra‐city bus terminal at Jongshina
4 Paper Recycling Project
5 Bio‐ Compact Natural Gas (CNG)
6 Norzin Lam pedestranization and beautification
7 Chhukha‐Damchu By‐Pass Toll Operations & Maintenance
Ministry of Work and Human
Settlement8Integrated Solid Waste Management (generation, segregation,
transfer, sorting, treatment, recovery and disposal)
9 Drinking water supply in Thimphu
10 Developing cottage and small industry infrastructureDepartment of Cottage & Small
Industry
11 Construction and operation of cinema theatre in 5 DzongkhagsMinistry of Information and
communication
12 Medical oxygen plant JDWNRH
PPP project long list
# Project Name Implementing Institutions1 Thimphu Integrated Bus Terminal. Thimphu Thormde
2 Drinking water supply in Thimphu MOWHS
3 Chhukha‐Damchu By‐Pass Toll Road
Operations & Maintenance
MOWHS
4 Government office building construction (12 FYP)
Government Agencies
5 Medical oxygen plant JDWNRH, Thimphu
Projects with potential to serve as PPP project and TA pilot project
Pilot project Thimphu Integrated Bus Terminal
Location : Olakha
ChallengesLack of capacity and awareness
Lack of institutional capabilities
Access to Finance
Underdeveloped market
Landlocked and Small domestic
market
PPP and SDG
PPPQuality Infrastructure development
Economic diversification
Business opportunitiesEmployment generationPvt. Sector development
Government: Effective utilization of resources
Meet SDG 2030Industry, innovation and infrastructure (SDG 9, target 9.1)
Poverty reduction (SDG1)Reduced inequalities (SDG 10) Sustainable cities and communities (SDG 11)Partnership for the goals (SDG 17)
THANK YOU