Photo: Highways England | Flickr Creative Commons
When PPP investors are asked what they look for in a project, they would typically reply they like projects that are bankable, where risks are fairly allocated between the government and the sponsor. When one probes deeper though as to where they normally invest, you might elicit this response: in a market where there is deep commitment by the government to undertake an effective PPP program. This is a very telling answer sometimes lost to governments that want to pursue ambitious PPP programs. Bankability for a developing country involves more than de-risking projects. More importantly, it entails de-risking the country and its PPP program.
Representatives of chambers of commerce and private sector promotion agencies from developing countries expressed their concerns about where the new sources of growth would come from in future years, at a meeting of the World Bank Group's Private Sector Liaison Officers held in Istanbul on October 5.
A lively discussion between the PSLOs and MIGA management covered subjects relating to foreign direct investment into emerging economies, as well as investments by emerging economies into other emerging economies ("South-South" investment).
There is a real concern about how the infrastructure gap in developing countries will be filled following the crisis, given the new scarcity of private funds for public-private partnerships.