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Public Private Partnerships

Ensuring the End User is at the Core of a Business Model: Why I Chose to Be a Social Enterprise

Dr. Parveez Ubed's picture

There is a perfect start, there is a less than perfect start and there is an imperfect start. As a social entrepreneur, the thing I have learned is that it pays to START- even if it’s less than perfect or imperfect.

So, there I was, I had left my job, had no savings, but kept people like Bonti in my mind. But, I had no idea how, or even where to start. 

Eye Research Center (ERC) Eye Care was officially founded in the summer of 2011. With the generous help of my mother, we were just one clinic – in her kitchen – in the heart of the city. Although we had a strong mission, we quickly realized that to the outside world, there was nothing to differentiate us from other ophthalmic clinics spread across the city. But what exactly was ERC Eye Care? We had initially set it up as a sole proprietorship, as it was the cheapest and easiest registration process, but we weren’t strictly a for-profit business. Were we a NGO? Or were we something else entirely?

Obrigado, Brasil!

Clive Harris's picture
Paving a highway in Brazil. In 2014, Brazil's
 infrastructure investment commitments
​drove an overall global increase.
In March we released the update from the Private Participation in Infrastructure (PPI) Database for the first six months of 2014, covering investment activity in energy, transport, and water and sanitation. The good news of a rebound of investment commitment from a decline in 2013 was noteworthy, alongside the heavy concentration of activity in Brazil.
 
The PPI Database’s 2014 full year update for these sectors has just been released, and it confirms the trends we began tracking for the first six months. Total investment in infrastructure commitments for projects with private participation in the energy, transport, and water and sanitation sectors increased six percent to $107.5 billion in 2014 from levels in the previous year. The total for 2014 is 91 percent of the five-year average for the period 2009-13, which is the fourth-highest level of investment commitment recorded – exceeded only by levels seen from 2010 through 2012. 
 
This increase over 2013 was driven largely by activity in Brazil. Without Brazil, total investment commitments would have fallen by 18 percent, from $77.2 billion in 2013 to $63.4 billion in 2014.  Although this is lower than H1 2014 (57%), Brazil’s large stake is a continuation of a recent trend.
 
The Latin America and the Caribbean (LAC) region saw $69 billion of investment commitments, or nearly 70 percent of the total for 2014. Three of the top five countries by investment commitments in 2014 were from LAC.  The top five, in order, were Brazil, Turkey, Peru, Colombia, and India. 

Pitfalls and Stumbling Blocks: The Challenges of Being a Social Enterprise

Dr. Shelly Batra's picture

In 2005, I took a strategic decision. Much as I loved surgery, I shifted my focus to Tuberculosis, (TB). While I faced criticism and jeers from my colleagues and other NGOs, I quickly realized my next challenge. In order to deliver crucial, life changing services – TB or otherwise – one has to work with the government.

Helping communicate the potential of PPPs through a new, free online course

Clive Harris's picture

Public-Private Partnerships (PPP): How can PPPs help deliver better services? New, free massive open online course (MOOC) course provides an understanding of the key principles of PPPs and the role of PPPs in the delivery of infrastructure services, particularly in emerging markets.

Public-Private Partnerships MOOCThe World Bank Group’s twin goals of ending extreme poverty by 2030 and promoting shared prosperity can’t be achieved unless we see a huge boost in the quality and quantity of infrastructure services. Boost infrastructure and do it right and you can generate jobs and boost economic growth. Improving sanitation and access to clean water is essential to improve health outcomes. 
 
According to World Bank President Jim Yong Kim, “Today, the developing world spends about $1 trillion on infrastructure, and only a small share of those projects involves private actors. Overall, private investments and public-private partnerships in developing countries totaled $150 billion in 2013, down from $186 billion in 2012. So it will take the commitment of all of us to help low- and middle-income countries bridge the massive infrastructure divide.”
 
Public-private partnerships (PPPs) can be an important way for governments to help supplement the role of the public sector in meeting the infrastructure deficit.  But PPPs are controversial – there have been some high profile, expensive failures, and some stakeholders feel the private sector should not be involved in providing basic infrastructure services like water. 
 

Structured dialogue, value chain and competitiveness: A journey through implementation, from Copenhagen to Kabul

Steve Utterwulghe's picture



Afghanistan. Photo by Steve Utterwulghe.

This latest blog post should start with a mea culpa. Indeed, my 2015 work plan for public-private dialogue (PPD) did start in Dushanbe, Tajikistan, not Copenhagen. However, who can swear that he never tweaked a title a tiny bit to make it catchier?
 
While Dushanbe hosted the very productive First Regional PPD Forum in the “stans,” the 8th Global PPD Workshop took place in March in the Danish capital. There, “more than 300 representatives from governments, private enterprises, PPD coordination units, investors’ councils, competitiveness partnerships, civil society, business organizations, and various development partners participated in the event. They represented 54 countries and a total of 40 PPD initiatives who joined the event to share their experiences and discuss lessons learned.”
 
High-powered individuals kick-started the Copenhagen event, including HRH Crown Princess Mary of Denmark, who reiterated that, to make a difference in the world, “it will take partnerships across countries, governments, and between public and private sectors.”
 
Once the keynote speeches had been delivered, the real work began among the delegates and with the PPD experts. I jumped from impromptu coffee break to coffee break and strategized with the Côte d’Ivoire delegation on how to prepare for the National Day of Partnership/Dialogue in Abidjan; discussed ways to better involve the private sector in Morocco; debriefed with the Guinea Minister of Industry, SMEs and Private Sector Promotion on how the PPD structure that we helped put in place is strengthening the local value chain for extractive industries (see below); and moderated an engaging session on public-private dialogue in fragile states and conflict-affected countries (FCS), which provided great insights as I prepared to fly out on PPD missions to Somalia and Afghanistan.
 
Aside from the buzz of international gatherings, what really matters for the delegates, from both governments and the private sector, is to get inspired and bring back home ideas that can be adapted locally and successfully implemented. Public-private dialogue is an art defined by some fundamental core principles that can be adjusted according to specific needs and environments.
 
As a reminder, PPD refers to the structured interaction between the public and private sectors to promote the right conditions for private sector development. Its ultimate function is to contribute to a prosperous economy by expanding market opportunities and enabling private initiative. This is also very much the mission of the new World Bank Group Global Practice on Trade & Competitiveness (T&C). Its Senior Director, Anabel Gonzales, wrote in one of her blog posts on Trade and Development in Africa that fostering competitiveness and strengthening supply chains is a key to development and an integral part of T&C’s offering.
 
As I reflected on the links between structured multi-stakeholder dialogue, competitiveness and supply chains, I remembered a Harvard Business Review article written by Michael Porter and Mark Kramer, entitled Strategy and Society: The Link between Competitive Advantage and Corporate Social Responsibility.
 
What particularly caught my attention at the time was the theory on interdependence between companies and society that the Harvard professors put forward. They argued that this interdependence takes two forms: the social impact that a company’s activities has on society, or “inside-out linkages,” and the social influences on the company’s competitiveness, or “outside-in linkages.”
 

Welcome to the PPP Realities Blog

Laurence Carter's picture

We’re excited to launch this new dedicated blog platform around public-private partnerships (PPP). We envision it as a space for sharing experiences, disseminating knowledge and generating discussion. We hope that this space will be enriched by perspectives from PPP practitioners in governments, from investors, financiers, advisors, associations and so forth. 

 

Why? There is a danger that public-private partnerships are being oversold.  
 

Public-private partnerships
can help secure investments,
expertise and other resources
for infrastructure that delivers
essential services like
clean water.

A “disappointment gap” currently exists between high expectations and the sober reality of successfully concluded partnerships. Too much attention is often paid to financing, and not enough to the less glamorous hard work of preparation. There isn’t enough information being collected about performance. And there are different interpretations about what PPP means, exactly.

 

Right now, the PPP discussion is rhetoric-rich and data-poor. It is expectation-heavy, and cold-light-of-day reality is tougher. That’s a shame, because, when prepared carefully, with full assessment of the different options, and the fiscal/economic/environmental/social implications, PPPs can be a useful tool to help governments improve the quality and reach of their physical and social infrastructure services. 

 

We’re working alongside the world’s other multilateral development banks to prepare a joint website for PPPs, which will be called the PPP Lab. That upcoming website – launching in June – will contain quantitative and qualitative information about PPPs and private infrastructure, including the Private Participation in Infrastructure Database, the Public-Private Partnerships in Infrastructure Resource Center, Infrascope reports, and the PPP Reference Guide.

In addition, our new online course on PPPs will introduce real-world cases to an audience that doesn’t attend PPP conferences or read development banks’ annual reports.

 
There are plentiful examples that illustrate the realities, challenges and opportunities that PPPs offer. With your help, we intend to share and explore many of them on this blog. We invite you to read, share and engage with us on these topics and follow us on Twitter at @WBG_PPP.

Institutional Investment in Infrastructure (“In3”): A view from the bridge of a development agency

Jordan Z. Schwartz's picture

The Buzz on the Street:   Can institutional investors really close the infrastructure gap? 

Once again, infrastructure is a hot topic.  Not since the first waves of energy, water and transport privatizations in the early 1990s has infrastructure been a central topic in the daily discourse of the media, of the development community, of economists and financiers.  Now, governments are crying for more of it, new development institutions are being built around it and even the IMF is asserting its central role in economic growth.

Not only has infrastructure re-emerged as a popular, nearly consensus solution to the economic and societal woes of developing countries and industrialized nations alike, but the font of the resources needed to fill the infrastructure financing gap has also been identified.  Suddenly, it is impossible to walk through London, Washington, Paris or Singapore without bumping into a conference on institutional investors in infrastructure.  The G20 has discovered the link along with their business counterparts at the B20.  So too has the World Economic Forum, the OECD, the UN and the international financial institutions.  Match the long-term liabilities of pensions and insurance plans with long-term assets, the mantra goes, and the infamous infrastructure gap will close.  Win-win.

If only life were so easy. 

Newest private participation in infrastructure update shows growth and challenges

Clive Harris's picture



In 2013, investment commitments to infrastructure projects with private participation declined by 24 percent from the previous year.  It should be welcome news that the first half of 2014 (H1) data – just released from the World Bank Group’s Private Participation in Infrastructure (PPI) database, covering energy, water and sanitation and transport – shows a 23 percent increase compared to the first half of 2013, with total investments reaching US$51.2 billion.

closer look shows, however, that this growth is largely due to commitments in Latin America and the Caribbean, and more specifically in Brazil. In fact, without Brazil, total private infrastructure investment falls to $21.9 billion – 32 percent lower than the first half of 2013. During H1, Brazil dominated the investment landscape, commanding $29.2 billion, or 57 percent of the global total.

Four out of six regions reported declining investment levels: East Asia and the Pacific, South Asia, Africa, and the Middle East. Fewer projects precipitated the decrease in many cases. Specifically, India has experienced rapidly falling investment, with only $3.6 billion in H1, compared to a peak of $23.8 billion in H1 of 2012. That amount was still enough to keep India in the top five countries for private infrastructure investment. In order of significance, those countries are:  Brazil, Turkey, Mexico, India, and China.

Sector investments were paced by transport and energy, which together accounted for nearly all private infrastructure projects that were collected in this update. The energy sector captured high investment levels primarily due to renewable energy projects, which totaled 59 percent of overall energy investments, and it is poised to continue growth due to its increasing role in global energy generation.

The energy sector also had the biggest number of new projects (70), followed by transport (28), then water and sewerage (12). However, transport claimed the greatest overall investment, at $36 billion, or 71 percent of the global total.

While we need to see what the data for the second half of 2014 show, what we have to date suggests that infrastructure gaps may continue to grow as the private sector contributes less. It also suggests that, in many emerging-market economies, there is much work to be done to bring projects to the market that will attract private investment and represent a good deal for the governments concerned. 
 

PPPAmericas 2015: Taking public-private partnerships to the next level

David Bloomgarden's picture

The Latin America and the Caribbean region is crying out for infrastructure improvements. An investment estimated at 5 percent of the region’s GDP — or US$250 billion per year — is required to develop projects that are fundamental for economic development. This includes not only improving highways, ports and bridges, but also building hospitals and creating better transport, public transit and other mobility solutions for smarter cities. Rising demand for infrastructure also is prompting countries to redouble efforts to attract greater private investment

At the Multilateral Investment Fund (MIF), as at the World Bank Group, we believe that public-private partnerships (PPPs) can help governments fill this infrastructure gap. However, the projects must be implemented effectively and efficiently to achieve social and economic objectives.

Governments in the Latin America and the Caribbean region not only lack financing to address the infrastructure gap, but also face challenges in selecting the appropriate large infrastructure projects, planning the projects, managing and maintaining infrastructure assets — and gaining public support for private investment in public infrastructure. 

However, PPPs are gaining ground in Latin America and the Caribbean. Beyond the larger economies of Brazil, Colombia and Mexico, assistance from the MIF and the Inter-American Development Bank (IDB) has enabled countries such as Paraguay to develop laws that pave the way for PPP projects. Just this week, Paraguay announced its first such project, which involves an investment of US$350 million to improve and build more than 150 kilometers of roads. 

PPPs have been moving beyond classic interventions in public infrastructure, which have typically included roads, railways, power generation, and water- and waste-treatment facilities. The next wave of PPPs increasingly involves and provides social infrastructure: schools, hospitals and health services. In Brazil, IFC, the private sector arm of the World Bank Group, helped create the Hospital do Subúrbio, the country’s first PPP in health, which has dramatically improved emergency hospital services for one million people in the capital of the state of Bahia.

Beyond sovereign guarantees: The case for sub-national finance

Joshua Gallo's picture

In many countries, central governments have devolved the responsibility of infrastructure service provision to the sub-national level, which is essential for economic growth. Along with this devolution of provision responsibility comes the requirement to raise revenues, enhance efficiencies, improve commercial viability, and reduce a dependence on external financial support — including central government guarantees.
 
However, central governments are increasingly unwilling or unable (due to limitations of fiscal space) to guarantee sub-national borrowings. This new paradigm is testing the sub-nationals’ ability to raise financing to fulfill newfound responsibilities in infrastructure service provision.
 
Perhaps this is a blessing in disguise. Historically, easy access to sovereign guarantees has created perverse incentives for not pursuing more sustainable financing solutions. This dependence has also tainted the way that sub-nationals are perceived by the markets, by making them seem like reactive agents of development. This in turn has limited their access to finance and therefore their ability to develop. This approach must evolve, because whether the focus is climate change, massive migratory movements, or basic infrastructure needs, the struggle to advance the global fight against poverty and unsustainable development may be won or lost primarily at the local level in developing countries.


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