India recorded a 10-year low in investments in public-private sector in the year 2015, adding to contraction that pulled down the global investment to below its five-year average of USD 124.1 billion, the World Bank has said.
In its latest annual report, the World Bank said global investment in 2015 decreased to USD 111.6 billion, below the five-year average of USD 124.1 billion from 2010 to 2014.
“This contraction resulted from lower investments in Brazil, China and India,” the Bank said yesterday in its latest report on Private Participation in Infrastructure Database.
“India recorded a 10-year low in investments, as only six road projects — usually a rich source of PPI over the past 10 years — reached financial closure,” the World Bank said.
In South Asia, there were 43 deals for a combined total of USD 5.6 billion that closed in the region, representing 5 per cent of the total investment — a decline of 82 per cent from the five-year average of USD 30.5 billion.
“Consistent with historical trends, India generated a majority of the projects (36 out of 43); Pakistan had four; Nepal, two; and Bangladesh, one. Notably, 26 of the 36 projects in India, amounting to USD 2.0 billion, targeted renewable energy, while all of Pakistan’s projects, totalling USD 749.9 million, solely focussed on renewables,” the Bank said.
Solar energy investments climbed 72 per cent higher than the last five year average, while renewables attracted nearly two-thirds of investments with private participation, it said.
Global private infrastructure investment in 2015 mostly remained steady at USD 111.6 billion when compared to the previous year, it said.
Among the most notable, commitments in Brazil were only USD 4.5 billion in 2015 — a sharp decline from USD 47.2 billion the previous year, reversing a trend of growing investments, it said.
“Investment in China also fell significantly below its 5-, 10-, and 20-year averages, as the average transaction dropped to USD63 million,” it said.
By number of projects, however, these three historical heavyweights took the lead, with 131 of the 300 global deals, or 44 per cent of all projects.
Still their combined investment of USD 11.6 billion only made up 10 per cent of the global total, compared to 54 per cent in 2014, which was also the annual average over the previous four years.
According to the World Bank, global private infrastructure investment in 2015, though on par with the previous year, was 10 per cent lower than the previous five-year average because of dwindling commitments in China, Brazil, and India.
“The data finds that investments in other emerging economies increased rapidly to USD 99.9 billion, representing a 92 per cent year-over-year increase,” said Clive Harris, Practice Manager, Public-Private Partnerships, World Bank Group. “Eleven of these countries committed at least USD 1 billion in 2015, well above previous years with several countries reemerging from a two-year or more hiatus to include El Salvador, Georgia, Lithuania, Montenegro, Uganda, and Zambia,” he said.
“Regionally, private infrastructure investments stepped up in Africa and Europe and Central Asia but fell behind in East Asia Pacific, Latin America and the Caribbean, the Middle East and North Africa, and South Asia,” Harris added.
Interestingly renewables jumped ahead in 2015 as private infrastructure investments in solar energy swelled to USD 9.4 billion — 72 per cent higher than the last five years.
Renewables on the whole made up 63 per cent of global investment, signalling greater adoption of wind, hydro, and geothermal power.
The transport sector took in the highest commitment of USD 69.9 billion, or 63 per cent of global investment, followed by energy at 34 per cent and water at 4 per cent.
Out of 300 projects in 2015, energy captured the most with 205, well ahead of transport with 55 and water and sewerage with 40, it said.