ISLAMABAD: Pakistan led South Asia in private infrastructure investment in the region, receiving $5.9 billion in investments in 2017, thus becoming one of the world’s top five private participation in infrastructure (PPI) investment destinations, reveals a new World Bank report.

For the first time ever, investment in Pakistan surpassed that of India, which has traditionally been the heavyweight in the region. Invest­ments in Pakistan across four projects were far above the 2016 level of $1.7bn, according to the annual update of the PPI database just released by the World Bank.

The investment in South Asia stood at $11.7bn in 2017, up 90 per cent from the 2016 level with India seeing a slight rise from $4.3bn in 2016 to $4.8bn in 2017. Notably, for the first time since 2012, Sri Lanka and Afghanistan each received one investment project.

At a country level, the five countries with the highest levels of investment in 2017 were: China with $17.5bn across 73 projects, Indonesia $15.4bn across 11 projects, Mexico $8.6bn across 20 projects, Brazil $7.3bn across 24 projects and Pakistan $5.9bn across four projects. In 2017, in total, these five countries attracted $54.5bn, capturing 58pc of the global investment.

In 2017, the energy sector outpaced other sectors in attracting private sector investment, with $51.9bn invested in 203 projects which accounted for 56pc of total PPI. The transport sector accounted for $36.5bn in investments in 2017, making up 39pc of the PPI share.

The 66 transport projects had an average size $552.3 million, which was double the investment in the energy sector. Added together, the transport and energy sectors comprised 95pc of the cumulative PPI investments. The information and communication technology sector received only $3bn across five projects, followed by the water and sewerage sector, with only $1.9bn across 30 projects.

The $51.9bn invested in the energy sector in 2017 reflects an 11pc rise over the previous year’s commitment of $46.8bn. Of the electricity generation projects, renewables continued to dominate in 2017 at 173 out of 197 (88pc) projects from wind, solar, biomass, waste, geothermal, and hydropower.

PPI investment in 2017 at $93.3bn across 304 projects marks an increase of 37pc from 2016 levels. Yet it still remains the second lowest level of investment in the past 10 years and is 15pc lower than the past five-year average of $109.8bn. The increase over 2016 levels can be attributable to a few megaprojects in China and Indonesia as well as a recovery in South Asia, led by Pakistan.

The number of projects also increased marginally by 9pc from 280 to 304 in 2017. The average project size grew by 26pc from $244m in 2016 to $307m in 2017, as there were 20 megaprojects with an average size of $2.4bn accounting for 51pc of the total investment, in contrast to 13 projects totalling 40pc of the total share in 2016.

In 2017, at $14.7bn, the PPI per capita also increased by 35pc over the 2016 level. Investment as a percentage of GDP improved as well, up from 0.25pc in 2016 to 0.34pc in 2017. Despite the growth, investments in infrastructure remained a very low portion of GDP in all emerging markets and developing economies.

The average project size rose to $307m last year, up 26pc from $244m in 2016 and also marks an increase in project size over the average of $276m for the past five years. However, the median project size only increased by 8pc (up from $95m to $103m), indicating that megaprojects had a significant impact in 2017.

Published in Dawn, April 19th, 2018