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ADB Supports Smarter Country Programming, Stronger PPPs in Pakistan

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The Asian Development Bank (ADB) and the Government of Pakistan agreed to chart new ways to pursue more robust and inclusive ADB investments in the country by scaling up public-private partnerships (PPPs) to tap private sector resources and meet Pakistan’s rising infrastructure needs.

The 3-day consultation workshop, titled “ADB Country Programming and Public-Private Partnerships in Pakistan,” which started on 14 May at Bhurban near Islamabad, will be attended by over 100 delegates including senior government officials, economists, planners from federal and four provincial governments, and ADB staff. Participants will discuss development opportunities and pipeline of projects as part of ADB’s Country Operation Business Plan, 2019–2021, for Pakistan.

ADB Country Director for Pakistan Ms. Xiaohong Yang and ADB Office of Public-Private Partnerships Director Mr. Takeo Koike opened the workshop by reiterating ADB’s continued commitment to support Pakistan in achieving its key development goals outlined in the ADB-Pakistan country partnership strategy. Ms. Yang called for closer coordination and consultation between ADB and partners to ensure smarter investment programs to better respond to Pakistan’s evolving priorities, particularly in the education and health sectors, as well as in energy, transport, agriculture, and institutional reforms.

Department for International Development (DFID) of the United Kingdom Head of Economic Growth Group Ms. Patricia Seex expressed her appreciation for ADB and the government’s efforts in facilitating an enabling environment and effective regulatory framework to promote PPPs at the national and provincial levels to increase Pakistan’s economic growth—needed to create jobs and help Pakistan achieve middle-income status.

Chairman of the Planning and Development Board for Punjab Mr. Mohammad Jahanzeb Khan and Head of PPP Cell and Member of the Planning and Development Board of Punjab Mr. Agha Waqar Javed reaffirmed the government’s commitment to work closely with ADB in delivering high quality development projects and programs. They also provided updates on reforms to improve regulatory and policy frameworks conducted by the government intended to encourage greater private sector participation in public sector development programs with the federal and provincial governments.

Pakistan’s public investment in infrastructure has historically fallen short of the estimated annual investment need of 7.6% of the country’s gross domestic product, or about $20 billion per year.

The current surge in infrastructure spending reaching more than 67% of the total development budget in the public sector requires effective fiscal consolidation measures and strategies to reduce the deficit and increase efficiencies, including mitigating potential fiscal risks posed by PPPs. The outstanding infrastructure financing from local commercial banks in 2016 was only about $4 billion, with 65% of the local bank’s lending going into energy projects.

“Project financing in Pakistan is only offered by a few commercial banks, with little or no role of capital markets or other financial institutions,” said Ms. Yang. “This leads to lack of sufficient financial depth and backing in the country’s domestic credit markets to accommodate the long-gestation of infrastructure projects. In the meantime, we are in short supply of a well prepared and bankable PPP pipeline.”

Ms. Yang added, “In this regard, I commend the Sindh and Punjab provincial governments’ efforts to develop their investment frameworks to provide an enabling environment for the private sector to invest in infrastructure. The private sector has responded positively, but more needs to be done to create an effective fiscal risk vetting and management regime for greater private sector partnership in the public sector.”

ADB is already providing a total of $200 million in loans for projects supporting PPPs in Punjab and Sindh. The investments will augment and assist the provincial government’s efforts to increase the commercial viability of projects, as well as mobilize more private sector participation in PPPs. The loans will also help develop PPPs across sectors, and improve the government’s ability to review, develop, and implement sustainable and fiscally responsible PPP projects. ADB’s efforts are supported by DFID, through a $24 million grant and a $4 million technical assistance, both administered by ADB.

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EU Politics

EU and Qatar sign landmark aviation agreement

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The European Union and the State of Qatar today signed a comprehensive air transport agreement, upgrading rules and standards for flights between Qatar and the EU. The agreement sets a new global benchmark by committing both sides to fair competition, and by including social and environmental protection. The signing means new opportunities for consumers, airlines and airports in Qatar and the EU.

Qatar is an increasingly important aviation partner for the EU. It was the 15th largest extra-EU market in 2019 with 6.3 million passengers travelling between the EU and Qatar. Ensuring open and fair competition for air services between both is therefore crucial, also for routes between the EU and Asia.

Adina Vălean, Commissioner for mobility and transport, said: “This agreement, the first one between the EU and the Gulf region, is a global benchmark for forward-looking aviation agreements. It is testimony to our shared commitment to economically, socially and environmentally sustainable aviation, based on a modern framework covering fair competition and closer cooperation on social and environmental matters. This agreement will bring new opportunities, more choice and higher standards for passengers, industry and aviation workers.”

Today’s agreement creates a level playing field that is expected to result in new air transport opportunities and economic benefits for both sides:

  • All EU airlines will be able to operate direct flights from any airport in the EU to Qatar and vice versa for Qatari airlines.
  • EU airports in Germany, France, Italy, Belgium and the Netherlands will be subject to a gradual build-up of capacity until 2024. For more details on this, see the Q&A.
  • Strong provisions on open and fair competition will guarantee a level playing field.
  • The parties recognised the importance of social matters, agreed to cooperate on these and to improve their respective social and labour laws and policies as per their international commitments.

The agreement will facilitate people-to-people contacts and expand commercial opportunities and trade. Going beyond traffic rights, the EU-Qatar agreement will provide a single set of rules, high standards and a platform for future cooperation on a wide range of aviation issues.

Background

Qatar is a close aviation partner for the European Union; more than 6 million passengers travelled between the EU and Qatar per year under the existing 26 bilateral air transport agreements with EU Member States prior to the pandemic. While direct flights between most EU Member States and Qatar have already been liberalised by those bilateral agreements, none of them include provisions on fair competition, or social and environmental issues, which the Commission considers essential for a modern aviation agreement.

In 2016, the European Commission obtained authorisation from the Council to negotiate an EU-level aviation agreement with Qatar, which started on 4 March 2019. While the agreement still needs to be ratified by the parties before formally entering into force, it will start being applied from today’s signature.

Similar EU comprehensive air transport agreements have been signed with other partner countries, namely the United States, Canada, the Western Balkans, Morocco, Georgia, Jordan, Moldova, Israel and Ukraine. Further air transport agreements with Armenia and Tunisia are expected to be signed in the coming weeks.

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Sakharov Prize 2021: the finalists

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The 2021 finalists for the European Parliament's Sakharov Prize for Freedom of Thought are Afghan women, Jeanine Áñez and Alexei Navalny

The 2021 finalists for the European Parliament’s Sakharov Prize for Freedom of Thought are Afghan women, Jeanine Áñez and Alexei Navalny.

Meet this year’s finalists of the European Parliament’s Sakharov Prize for Freedom of Thought, who were chosen at a joint meeting of the foreign affairs and development committees on 14 October:

  • Afghan women, represented by 11 human rights activists
  • Jeanine Áñez, Bolivian politician
  • Alexei Navalny, Russian activist and political prisoner


Afghan women

Under the previous Taliban regime, women experienced forced marriage, high maternity mortality, low literacy, forced virginity tests and couldn’t travel without a man. Following the Taliban’s return to power, women are again excluded from government and education and their rights and freedoms are threatened. The women, who are nominated for their brave fight for equality and human rights, are:

  • Shaharzad Akbar – chair of the Afghan Independent Human Rights Commission (AIHRC)
  • Mary Akrami – head of the Afghan Women’s Network
  • Zarifa Ghafari – mayor of Maidan Shar since 2018
  • Palwasha Hassan – activist and the director of Afghan Women Educational Centre (AWEC)
  • Freshta Karim – founder of a mobile library and an advocate for education and learning
  • Sahraa Karimi – first female president of the Afghan state film company
  • Metra Mehran – women empowerment and education advocate and co-founder of the Feminine Perspectives Movement
  • Horia Mosadiq – human and women’s rights activist
  • Sima Samar – human rights advocate, former Minister of Women’s Affairs and former chair of Afghan Independent Human Rights Commission
  • Habiba Sarabi – member of the negotiating team of the Islamic Republic of Afghanistan
  • Anisa Shaheed – political reporter


Jeanine Áñez

Jeanine Áñez is a Bolivian politician who became the interim president of her country in November 2019, after alleged electoral fraud by incumbent Evo Morales. In November 2020, after free and fair elections there was a peaceful transfer of power. However, on 13 March 2021 she was arrested on charges of “terrorism, sedition and conspiracy”. Accused of plotting a coup d’état against Morales, she has been imprisoned ever since.

Alexei Navalny

Alexei Navalny is a Russian opposition politician, anti-corruption activist and major political opponent of Russian president Vladimir Putin. Known through his LiveJournal blog, YouTube and Twitter accounts, where he has millions of followers Navalny came to international prominence by organising demonstrations, running for office and advocating reforms against corruption in Russia, Putin and his government. In August 2020, while on a trip to Siberia, he was poisoned. He spent months recovering in Berlin, but returned to Moscow in January 2021 where he was arrested. In February he was sentenced to 2½ years in prison. Now incarcerated in a high-security penal colony, he went on a 23-day hunger strike in April to protest the lack of medical care. In June 2021, a Russian court banned Navalny’s regional offices and his Anti-Corruption Foundation.

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European Innovation Council announces new wave of start-up champions

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The European Commission’s European Innovation Council has selected 65 innovative start-ups and SMEs to receive €363 million of funding for breakthrough innovations. Each company will receive a combination of grant financing and equity investment of up to €17 million to develop and scale up their ground-breaking innovations in healthcare, digital technologies, energy, biotechnology, space and other. This is the first batch of companies that will be funded under the fully-fledged European Innovation Council (EIC) Accelerator.

Mariya Gabriel, Commissioner for Innovation, Research, Culture, Education and Youth, said: “The EIC Accelerator is a unique European funding instrument of the European Innovation Council. It supports the development of top-class innovations through crowding-in private investors and offers a portfolio of services to support their scaling-up. With the European Innovation Council we aim to bring Europe to the forefront of innovation and new technologies, by investing in new solutions for the health, environmental and societal challenges we are facing.”

The companies were selected following a new two-step process, introduced under Horizon Europe. Applications are rigorously assessed by external experts and followed by an interview with a jury of experienced investors and entrepreneurs. Among the companies selected are:

  • Dutch Sensius BV that developed a thermotherapy system to treat the head and neck cancer without negative side effects;
  • French Alice & Bob that invented a new type of self-correcting quantum hardware to build the world’s first fault-tolerant commercial quantum computers;
  • Lithuanian UAB INOVATYVI MEDICINA that developed a smart, sensory, tele-operated robotic system, which allows an endovascular procedure to be performed without exposure to harmful X-rays;
  • Norwegian Bluegrove AS that introduced the most advanced salmon welfare monitoring and prediction solution to take care of fish welfare.

The 65 successful companies are established in 16 countries. The demand for equity financing through the new EIC Fund was particularly high, with 60 out of the 65 companies. This means that €227 million out of the total €363 million are expected to be in the form of investment component.

Background

The EIC Accelerator offers start-ups and SMEs grants of up to €2.5 million combined with equity investments through the EIC Fund ranging from €0.5 to €15 million. In addition to financial support, all projects benefit from a range of Business Acceleration Services that provide access to leading expertise, corporates, investors and ecosystem actors. 

The EIC was launched in March 2021 as a major novelty under the Horizon Europe programme, and following a successful pilot phase between 2018 and 2020. It has a budget of over €10 billion of which approximately €1.1 billion is available in 2021 for the EIC Accelerator. The majority is open to breakthrough innovations in any field, while €495 million is earmarked for Strategic Health and Digital technologies and Green Deal solutions.

There were two rounds of direct equity investments under the EIC Pilot earlier this year, in January and in June, with 111 highly innovative start-ups and SMEs receiving more than €500 million to scale up breakthrough innovations. Among them there were two ‘unicorn’ companies.

A new start-up friendly application process has been introduced this year, under Horizon Europe, where companies can submit their ideas at any time for an immediate fast assessment. Successful candidates are invited to prepare a full application with the help of free business coaching. The full applications are then evaluated at regular cut-off dates approximately every 3 months. Since March over 4,000 start-ups and SMEs have sent their ideas, of which 801 presented full applications to the first cut-off on 16 June 2021 and a further 1098 to the second cut-off on 6 October, which are now being assessed. The results of this second batch of EIC Accelerator companies will be announced by the end of the year and the next cut-off date is expected in the beginning of 2022.

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