Government mulls ‘infra’ bonds to bankroll PPP project

THE government will sell infrastructure bonds in the early part of 2011 to ensure funding for private sector proponents in the Public-Private Partnerships (PPP) program.

Finance Secretary Cesar Purisima yesterday said bonds with a maturity of 25 years would be sold in the first quarter of 2011 for the purpose of providing funding for the PPP projects.

Purisima said proceeds from the new bond sale would be funnelled to a pool of funds that could be accessed by investors undertaking any of the inaugural PPP projects to be unveiled during a summit slated this month.

“We will issue the bonds then lend the proceeds to the project proponents,” Purisima said.

The finance chief declined to divulge the size and target date for the planned “infrastructure bonds.

He nevertheless said, “We will do it, when we need it.”

Purisima also said the government may have to present a “longer PPP list” during the PPP Summit in late November instead of the planned original 10.

He said after this month’s summit, more than 10 projects would unveiled later in 2012 and “much more” in 2013.

The finance chief admitted some of the PPP projects have yet to complete their feasibility studies.

He said there are now a total of 100 PPP projects that are being considered by government.

The planned “infra” bond float was the latest in the array of funding strategies that government has been mulling over since President Aquino announced the PPP initiative as the hallmark of his
administration’s investment policy during his first State-of-the-Nation Address (SONA) in July.

In September, the government said it was considering issuing zero coupon 25-year debt papers that would strategically target insurance players, state pension funds and other government financial institutions (GFIs) for its PPP program.

In August, when the PPP proposal was first to get serious attention, the government said it may have to go off-shore to tap multilateral agencies and foreign investment groups in the US and Europe to raise at least $10 billion in funding sources.

Purisima had said that a pool of funds would be set up to be funded by low-cost loans from multilateral donor agencies, state pension funds and other lending institutions, which could be accessed by PPP proponents.

The government also announced the possible creation of a “catalyst” agency that would oversee the implementation of the multi-billion infrastructure projects to be solicited under the PPPs program. Dino Ng

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