Asia’s infrastructure needs are estimated to exceed $1.7 trillion annually by at least 2030. However, the country’s or MDB’s financing is unlikely to meet even half of this demand. For this reason, PPP projects, which can leverage private capital to finance infrastructure development in emerging markets have become increasingly important internationally. In the case of Korea, it is also necessary to expand support for PPP projects in order to revitalize the participation of domestic companies in infrastructure development in recipient countries and to reduce the financial burden on recipient countries. To this end, it is necessary to leverage the expertise of the network of international financial institutions such as MDBs and DFIs to secure opportunities to enter regions where it is difficult to find direct business. In this study, we analyzed Korea’s PPP-related ODA policies and cases, as well as the PPP operation methods and cases of MDB, and derived MDB utilization plans centered on Korea’s PPP.

Chapter 2 examined how MDBs operate PPPs. Based on the analysis of PPP types, business structures, and stakeholders, the role of MDBs in the PPP business was analyzed in depth. This study examined the specific services that MDBs provide to create an enabling environment for PPP promotion and to build PPP capacity in developing countries, as well as how they participate directly in PPP projects through equity investments, loans, and guarantees to reduce credit and political risks are carried out. The analysis of the PPP operations of the MDBs, such as the Asian Development Bank (ADB) and the World Bank Group (WBG), provides some important lessons.

First, this report finds that the MDBs operate their PPP programs and specific projects based on exactly defined procedures and processes. More specifically, it is found out that the MDBs develop and operate PPP projects through five stages that can be divided into upstream and downstream stages. Therefore, it is one of most important recommendations of this study that the Korean government, related institutions and private companies interested in participating in the international PPP projects must pay policy attention to the entire project cycle of PPP programs, and not only to specific PPP projects tendered by the MDBs.

Second, this study recommends that the Korean government to more ativiely participate in the trust funds established by the MDB, such as the AP3F of the ADB and the GIF of the World Bank Group, as they often function as a vehicle for transferring relevant information on PPP projects. Countries that provides financial contribution to such trust funds can have a seat in the steering committee, where relevant information flows and important decisions are made. More active participation will lead to an increase in Korean voice and influence. After committing USD 5,000,000 to the AP3F in 2023, the Korean government is well advised to look into the possibility of financiallly contributing to the GIF, as well.

Third, the Korean government is recommended to make every possible effort to increase project influence by rapidly increasing the number of regular Korean staff in MDBs. Indeed, Korea is counted as a country with a comparatively large gap between the financial contributions and the number of regular staff of Korean nationality. It is also important to strengthen the human capacity and capabilities of the local offices of MDBs established in Korea, as they are the first point of contact for private-sector actors when interested in international PPP projects tendered by the MDBs.

Fourth, by establishing a ‘PPP Focal Point’, the effectiveness and efficiency of policy efforts to increase Korean companies’ participation in international PPP projects can be strengthened substantially. The PPP Focal Point, which can be established in cooperation with related public institutions such as the KIEP, the KOICA and the KOTRA, should serve as a center for gathering PPP-related information and for formulating operational strategies related to international PPP projects, with the ultimate goal of stimulating the private sector participaton.

Chapter 3 analyzes the cases of MDBs and PPPs in major donor countries. This study examined the current status of MDB and co-financing in public development cooperation projects, and analyzed the PPP cases of MDBs with a focus on climate change-related projects. Through the case studies of hydroelectric power, solar power generation, wind power generation, waste-to-energy, and green power transmission upgrades, the background and purpose of each project, business structure and financing, and business characteristics were analyzed. In addition, through the case of Proparco, a French development finance institution (DFI) that supported the biomass power plant in Ivory Coast, was used to analyze how a French company won the PPP project. The following implications derived from the analysis of the MDB PPP cases will help Korea derive ways to participate more effectively in MDB PPP projects.

First, the amount of private finance mobilized for blended development finance projects is steadily increasing. Most PPP development finance projects involving private finance are led by MDBs. In the future, the role of bilateral development finance institutions (US DFC, Proparco, BII, FMO etc) in mobilizing private finance is expected to increase.

Second, when an MDB leads a development finance project, the MDB assists the recipient country’s government in preparing a master plan and development plans for the project area well in adavance of the project. Based on this, the project structure, financing plan, and risk mitigation plan are derived. Korea’s aid and development cooperation agencies need to be involved from the pre- and early stages of project formation, which will help Korea’s private companies get more opportunities for project participation.

Third, in the World Bank Group’s Scaling Solar program, the one-stop package of advisory services, investment and guarantee played a decisive role in attracting private investment and securing favorable electricity rates. Korea’s aid agencies and development finance institutions could adopt the one-stop package approach and improve the performance of PPP projects in which they participate.

Fourth, bilateral development finance institutions in developed countries actively participate in PPP projects by providing loans to SPCs. Korea needs to strengthen the role of the EDPF and establish a bilateral development finance institution that will help Korea promote PPP projects and support Korean companies’ participation in SPCs and EPCs.

Chapter 4 focuses on the need for and support status of ODA through PPPs in Korea, the opportunities and limitations of co-financing with MDBs, and the cases of co-financing and PPP. We have examined the need to expand development finance in Korea and how the Economic Cooperation Fund (EDCF), the Economic Cooperation Fund (EDPF), and the Overseas Infrastructure Fund are being used to promote Korean companies’ participation in PPPs in developing countries. In addition, we introduced the government’s proposal to revitalize co-financing with MDBs and pointed out the limitations of this plan. In particular, the cases supported under the EDCF were comparatively analyzed by PPP type. The following implications can be drawn from the case of ODA using PPP in Korea.

First, private companies that want to use EDCF need to understand the EDCF process from a developing country perspective and consider introducing EDCF at an appropriate time. However, in Korea, most private companies contact EDCF at the financing stage. Therefore, companies need to consult with EDCF from the business discovery stage.

Second, to identify promising PPP projects that can be linked to the EDCF, information sharing and cooperation channels with relavent ministries and agencies need to be expanded.

Third, the EDCF-MDB cooperative financing system should be utilized to discover large-scale PPP projects. It is necessary to list up the candidate PPP projects that comprehensively consider the policy relevance and the possibility of Korean companies’ participation through annual consultations with MDBs. In addition, it is necessary to understand where the priorities of international organizations lie.

Fourth, cooperation channels with recipient countries should be strengthened by linking them to EDCF policy consultations. The mid- to long-term project pool should be expanded by actively identifying candidate PPP projects in recipient countries. To this end, it is necessary for the EDCF local office to identify the recipient country’s PPP policies and candidate projects and strengthen consultations with the recipient country’s aid ministry and PPP management office.

Fifth, as PPP projects have recently become larger and more specialized, there is a need to promote grant and aid cooperation to strengthen the capabilities of recipient countries. An F/S suitable for the PPP project needs to be supported by matching the grant agency’s own master plan (M/P) and business feasibility study with the EDCF F/S resources.

Sixth, risk management related to PPP needs to be strengthened. A proper preliminary assessment of risks at each stage and countermeasures must be prepared, and who will bear the burden for each risk must be determined in advance. In addition, efforts should be made to obtain coverage from MDBs for interest rate swaps, foreign exchange risk hedging, and political risks.

MDB’s participation in the PPP project can provide important opportunities in terms of resolving the accumulated deficit or creating new business for Korean public enterprises. Major public enterprises should form a task force and actively participate in international PPP projects, and the Korea Eximbank should also pursue business exploration beyond the simple business guarantee. Considering that the traditional powerhouses in the PPP field are global accounting firms and law firms, interest in the PPP projects they discover is also necessary. In addition, Korean companies do not yet have much experience participating in international PPP projects, so their expertise is not high. Therefore, it is necessary to train human resources to accumulate experience and secure expertise.

based on the policy implications of the MDB’s PPP operation (Chapter 2) and the implications of the MDB’s PPP case (Chapter 3) and Korea’s ODA case (Chapter 4), Chapter 5 presents the necessary policy recommendations are presented to expand MDB participation in PPP. In order to expand the participation of Korean companies in the MDB PPP project, it is necessary to actively review the following points.

First, it is necessary to establish a development finance institution (DFI). In our case, the problem of the fragmentation of concessional loans and grants has not yet been significantly improved, so we need to drastically change the governance of aid process in order to increase the effectiveness of aid. In addition to grant and concessional loan, various development finance instruments such as equity participation and guarantees should be organically utilized to increase participation in development projects of developing countries. In order to overcome the problem of fragmentation, increase opportunities for overseas infrastructure projects in large-scale developing countries, and revitalize participation in MDB projects, it is necessary to establish a Korean-style DFI.

Second, government support needs to be systematized. In our case, it is difficult to find a strategic direction because various ODA funds, such as the Development Cooperation Fund and the MDB Trust Fund, are being implemented individually, and as a result, ODA funds have not been used effectively to win MDB projects. We also need to systematize cooperation with MDBs through selection and focus.

Third, in order to expand participation in the MDB project, it is necessary to deepen the understanding of the MDB project and establish a long-term strategy for it. Instead of focusing only on the bidding participation stage to win the contract, it is necessary to collect information throughout the entire project cycle and identify key stakeholders for marketing. In addition, it is necessary to establish an informationsharing platform so that both private and public companies can accumulate and share the experience of failing to win business orders.

Fourth, we need to strengthen channels for sharing information with the private sector and enhance two-way communication. To this end, it is necessary to meaningfully increase the proportion of private sector entrepreneurs among the members of the International Development Cooperation Commission.

국문요약

제1장 서론

제2장 MDB의 PPP 운영방식
1. PPP의 개념 및 유형
2. MDB의 PPP 관련 기능 및 역할 개요
3. 세계은행그룹의 PPP 관련 활동
4. ADB의 PPP 관련 활동
5. MDB PPP 운영방식 분석의 시사점

제3장 MDB 및 개발협력기관의 PPP 사례 분석
1. 공공 개발협력사업의 혼합금융 활용 현황
2. MDB의 기후변화 관련 PPP 사례
3. MDB PPP 사업의 기타 사례
4. MDB PPP 사례의 시사점
5. 프랑스 개발금융기관의 PPP 사례: 코트디부아르 바이오매스 발전소

제4장 한국의 PPP를 활용한 ODA 현황과 성과
1. 한국의 PPP를 통한 ODA 활성화 필요성
2. PPP 촉진을 위한 재원 지원
3. 정부의 MDB 협조융자 활성화 방안과 한계
4. 협조융자 및 PPP 활용 사례: 성과와 문제점
5. 한국의 PPP를 통한 ODA 사례의 시사점

제5장 결론

참고문헌

부록

Executive Summary