Photo: Courtesy of Safe Water Network
World Water Day is always a good time to take stock of where we are in achieving the water-related Sustainable Development Goals (SDGs). Most PPPs relate to relatively large investments in major infrastructure run by utilities. But in the developing world’s rapidly growing small towns and urban peripheries, we need something else.
Enter safe (also called small) water enterprises, an exciting group of dedicated social entrepreneurs who are beginning to gain traction providing high quality water to communities not served by utilities. For example, our friends at Safe Water Network recently announced they are now serving more than a million people in India and Ghana (more about that in this blog.) A 2017 report by Dalberg suggested a potential market of 3.9 billion people for safe water enterprises.
It takes a lot to do a first Public-Private Partnership (PPP) well. In the past 12 months, we witnessed the successful financial close of two landmark PPPs: the Tibar Bay Port PPP—a first for Timor-Leste, one of the youngest countries in the world—and the Kigali Bulk Water project in Rwanda, considered the first water build-operate-transfer project in Sub-Saharan Africa.
To make these projects happen, deal teams, sponsors, and financiers did outstanding work in difficult environments. The Public-Private Infrastructure Advisory Facility (PPIAF) also earned some bragging rights and a share of the battle scars along with these actors.
Recent estimates place global annual non-revenue water (NRW), i.e. water produced but not billed because of commercial or physical losses, at 126 billion cubic meters. This translates to nearly $40 billion in annual losses on waste and foregone revenues—a sum, that even if a fraction could be recovered, would underpin a compelling market opportunity for private service companies and a boost to public water utilities’ sustainability.
A new joint initiative is aiming to drive declines in NRW faster, cheaper, and more sustainably by assisting water utilities to engage private companies in performance-based contracts (PBCs). The World Bank’s Public-Private Infrastructure Advisory Facility (PPIAF) and the Bank’s Water Global Practice, in partnership with the International Water Association, analyzed 43 projects and determined that NRW initiatives supported by PBCs are 68 percent more effective compared to those undertaken by utilities alone, (see for example, Using Performance Based Contracts to Reduce NRW) and are systematically faster at reducing the rate of loss.
Photo: ispyfriend / iStock
It seems like every week there are new reports being published about public-private partnerships (PPPs) by different organizations around the world. How can you keep track of what’s new and what’s relevant for your work?
With over 4,000 documents on PPPs in seven different languages (English, Spanish, French, Portuguese, Arabic, Russian, and Chinese) in its searchable document library,
What’s been trending over the last quarter on the PPP Knowledge Lab?
Photo: Jorge Láscar | Flickr Creative Commons
The potential economic benefit from the cooperative use of the Nile’s water is estimated to be worth well over $11 billion—from irrigation and hydropower generation alone. But being able to harness those benefits is a far reach; the Nile Basin—a vital source of drinking water, irrigation, hydropower and transport—has a growing need for infrastructure investments to attain the full potential of this resource. Many of these infrastructure investments need to be coordinated between the basin’s 11 countries to ensure they are creating mutual benefits and are not causing harm to neighboring countries.
The Nile Equatorial Lakes Subsidiary Action Program - Coordination Unit (NELSAP-CU), one of the Nile Basin Initiative’s two investment programs, plays a prominent role in the region’s development. NELSAP supports poverty alleviation, economic growth, and the reversal of environmental degradation in the sub-region through cooperative development and water management. Between 2005 and 2015, we mobilized $90 million of cumulative finance for pre-investment programs (e.g. the Lake Edward and Albert Fisheries Project) and $930 million for investment projects (e.g. the Regional Rusumo Falls Hydroelectric Project).
Photo: BrilliantEye | iStock
As the only global facility specifically dedicated to reinforcing the legal, institutional and policy underpinnings of private sector participation in infrastructure—which we call the critical upstream—we at the Public-Private Infrastructure Advisory Facility (PPIAF) realize we have a key responsibility to developing countries.
That responsibility is to help client governments unlock their potential by de-risking investments and creating an enabling environment for private sector participation, itself a condition to achieving the Sustainable Development Goals and climate-smart objectives. As such, PPIAF fits neatly into the new Maximizing Financing for Development (MFD) approach to crowd in the private sector, an initiative launched by the World Bank Group and other multilateral development banks last year.
Photo: VahanN / Shutterstock.com
Downtown Yerevan. Gusty winds, frosty air. Inside a hotel in the town square, cocktails and canapés, speeches and signatures. On this evening in November 2016, representatives of the State Committee for Water Economy (the Armenian water authority) and Veolia (a large international water operator) gathered to celebrate the signing of a new partnership: a 15-year national lease to provide water and wastewater services for the whole country. The lease began in January 2017, thus marking the start of a “second generation” of water PPPs in Armenia. Solid gains had already been made under the “first generation” between 2000 and 2016. At this crucial juncture, a World Bank study reviewed Armenia’s experience so far and analyzed the way forward under the new national lease.
Photo: Artit Wongpradu / Shutterstock.com
Islamic finance has been growing rapidly across the globe. According to a recent report by the Islamic Financial Services Board, the Islamic finance market currently stands around $1.9 trillion. With this growth, its application has been extended into many areas — trade, real estate, manufacturing, banking, infrastructure, and more.
However, Islamic finance is still a relatively untapped market for public-private partnership (PPP) financing, which makes the recent publication Mobilizing Islamic Finance for Infrastructure Public-Private Partnerships such an important resource, especially for governments and practitioners.
Photo: Artit Wongpradu / Shutterstock.com
شهد التمويل الإسلامي نموا سريعا في جميع أنحاء العالم. ووفقا لتقرير صدر مؤخرا عن مجلس الخدمات المالية الإسلامية، فإن سوق التمويل الإسلامي يبلغ حجمها حاليا حوالي 1.9 تريليون دولار. مع هذا النمو، تم توسيع تطبيقه في العديد من المجالات -التجارة والعقارات والتصنيع والخدمات المصرفية والبنية التحتية، وغير ذلك كثير.
ومع ذلك، لا يزال التمويل الإسلامي سوقا غير مستغل نسبيا لتمويل الشراكة بين القطاعين العام والخاص، مما يجعل التقرير الصادر حديثا بعنوان تعبئة التمويل الإسلامي لشراكات البنية التحتية بين القطاعين العام والخاص مصدرا مهما، وخاصة للحكومات والممارسين.
Many countries are experiencing urbanization within the context of increased decentralization and fiscal adjustment. This puts sub-national entities (local governments, utilities and state-owned enterprises) in the position of being increasingly responsible for developing and financing infrastructure and providing services to meet the needs of growing populations.
However, decentralization in many situations is still a work in progress. And often there is a mismatch between the ability of sub-nationals to provide services, and the autonomy or authority necessary to make decisions and access financing—often leaving them dependent on national governments. Additionally, they may also contend with inadequate regulatory and policy frameworks and weak domestic financial and capital markets.
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- municipal governance
- infrastructure financing
- Public private partnership
- Public Private Partnerships
- Urban Development
- Public Sector and Governance
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- Europe and Central Asia
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