Financing >> Infrastructure Development Company Limited (IDCOL)

The Government of Bangladesh (GOB) created IDCOL with assistance from the World Bank. GOB created the company to extend long term funding to infrastructure projects. WB approved to lend GOB an amount equivalent to US $235 million through the PSIDP project. In this funding model, WB extended a loan to GOB, from which the GOB then extended it to IDCOL. IDCOL extended this loan to specific projects, along with other commercial lenders. Although the fund was set up, there was an insufficient pipeline of PPP projects and as a result, IDCOL was unable to lend about US$ 154 million that was later restructured to fund flood rehabilitation projects.

The lesson learnt in PSIDP has been that the creation of an investment arm does not result in a PPP pipeline, since conceiving and subsequent framing of the project (like commercial structuring, risk allocation, concession agreements development, mindset change) are extremely complex, and requires a lot of skill and understanding on the part of the government executing agencies involved.