The project

Vision

The Government of Punjab, through its state level agency for food-grain procurement, envisions increasing and improving wheat storage and distribution infrastructure in the state through private-sector participation.

Need

Punjab is the "breadbasket" of India with agriculture contributing almost 40% to the state gross domestic product in contrast to the national average of 26%. Wheat is procured from the farmers at more than 1500 “Mandis” (local procurement units). Currently, the Government has a stock of over 8-9 million tons of wheat, some of which is stacked in the open due to scarcity of warehouse space. The Government has reportedly procured another 11 million tons this season (April). Overall, Punjab is likely to face a storage shortage of around 4-5 million tons. High storage losses and procurement bottlenecks due to lack of sufficient storage place has prompted the Government to explore private-sector participation in developing scientific wheat storage and management facilities or “silos”. The Government is considering the development of silo-based facilities in the state and intends to develop a 50,000 ton silo facility as a pilot project to serve a catchment area of 8-10 Km.

IFC has been retained by the Government for designing and implementing the transaction for private-sector participation in this project. IFC as the Lead Transaction adviser would play a crucial role in developing a transaction structure that ensures sustainability of this Project and similar future PPP projects.

Scope

The project would be structured as a Public Private Partnership (PPP), whereby the private sector would be responsible for:

The Government would be responsible for:

Consultants

IFC’s work will be conducted in co-ordination with the Government and with the support of specialized consultants (legal, technical, environmental and social).