Bridging Financing Gaps in Bhutan: PPP an alternative tool 

PPP Unit

Department of Macroeconomic Affairs

Ministry of Finance

Date: 11th Dec,2018

Outline 

Current Status: Economic & Resource 

Bridging Financing Gaps : Alternative financing options

How PPP can help bridge the financing gap?

Challenges

PPP & SDG

Particulars 11 FYP Revised Estimate 

12 FYP Projection % Change

Revenue & Grants 196,132 268,978 37 %

Domestic Revenue 127,025 214,563 69%

Grants 68,470 54,415 ‐20 % 

Outlay 218,158 292,425 34%

Total Expenditure 215,793 292,425 36%

Current 105,927 177,100 67% 

Capital 109,866 115,324 5%

Fiscal Balance  ‐22,026  ‐23,447

1730 18101970

21502290 2300 2330 2340

25102720

0

500

1000

1500

2000

2500

3000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

GNI per capita, Atlas method (current US$)

Source: WDI 2018, WB

Source : https://rtm.gnhc.gov.bt/wp‐content/uploads/2017/03/Socio‐Eco‐Presentation‐10‐March.pdf

Preliminary Fiscal Projections (In Nu. Millions)

Current status : Economic & Resource 

Bridging Financing Gaps : Alternative financing options

Sustainable economic development:

• Approved Economic Development Policy 2016

FDI

Public Debt Policy. 

Fiscal Incentives 2016 .

External commercial borrowing  guideline 

in place 

Public Private Partnership (PPP) Policy.

How PPP can help bridge the Financing Gap

Globally : Annual infrastructure gap of $1 trillion to $1.5 trillion in developing countries.

Bhutan experiencing an increase in capital expenditure over the years ( Capital exp. 12 FYP ‐5%)

To bridge the gap: PPP is recognized as an alternative tool/ mechanism for infrastructure financing:

‐ A part of AAAA, endorsed by the UN General Assembly of 27th July 2015.

PPP promoted as one of the key strategy for achieving sustainable socio‐economic growth in Bhutan:

PPP Policy 2016 adopted:main objective to have a sustainable PPP market in Bhutan.

PPP Unit created under the MoF (2016)

PPP Rules and Regulations 2017 formulated.

PPP project pipeline

PPP pilot project

PPP Project lists

# Project Name Implementing Agency

1 Development of Neighborhood Nodes

Thimphu Thromde

(Municipal Corporation)

2 Thimphu Integrated Bus Terminal

3 Stock exchange cum intra‐city bus terminal at Jongshina

4 Paper Recycling Project

5 Bio‐ Compact Natural Gas (CNG) 

6 Norzin Lam pedestranization and beautification

7 Chhukha‐Damchu By‐Pass Toll Operations & Maintenance

Ministry of Work and Human 

Settlement8Integrated Solid Waste Management (generation, segregation, 

transfer, sorting, treatment, recovery and disposal)

9 Drinking water supply in Thimphu

10 Developing cottage and small industry infrastructureDepartment of Cottage & Small 

Industry

11 Construction and operation of cinema theatre in 5 DzongkhagsMinistry of Information and 

communication

12 Medical oxygen plant JDWNRH

PPP project long list 

# Project Name Implementing Institutions1 Thimphu Integrated Bus Terminal. Thimphu Thormde

2 Drinking water supply in Thimphu MOWHS

3 Chhukha‐Damchu By‐Pass Toll Road 

Operations & Maintenance

MOWHS

4 Government office building construction (12 FYP)

Government Agencies

5 Medical oxygen plant JDWNRH, Thimphu

Projects with potential to serve as  PPP project and TA pilot project

Pilot project Thimphu Integrated Bus Terminal

Location : Olakha

ChallengesLack of capacity and awareness

Lack of institutional capabilities 

Access to Finance 

Underdeveloped market

Landlocked and Small domestic 

market

PPP and SDG

PPPQuality Infrastructure development 

Economic diversification

Business opportunitiesEmployment generationPvt. Sector development

Government: Effective utilization of resources

Meet SDG 2030Industry, innovation and infrastructure (SDG 9, target 9.1)

Poverty reduction (SDG1)Reduced inequalities (SDG 10) Sustainable cities and communities (SDG 11)Partnership for the goals (SDG 17)

THANK YOU