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.
“If you want something new, you have to stop doing something old,”—good advice from innovation and management guru Peter F. Drucker. This approach was key to a PPP we coordinated in one of the world’s oldest areas, the West Bank.
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Bloggers write to share unique insights. They may want to simply share knowledge, push an issue forward, establish thought leadership, and in some cases drive business.
Bloggers also create community. For example, this blog platform reaches a subscribed community (25K in number!) interested in infrastructure finance, PPPs, and the use of guarantees to spur private-sector investments—especially in developing countries. With niche topics like this, a blogspace becomes a virtual gathering place where we can exchange war stories, spectacular examples, best practices, trends, and opinions. We can know that others care about the same topics. We can also blog to shape the demographics of discourse and raise specific voices.
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Regional trade in electricity and other energy products can be a powerful force for market integration and sustainable development. In the Arab world, there are great potential benefits from increasing electricity trade beyond its current, very low level. The potential shared value of trade in electricity in 2020–2030 is estimated at $12 billion. We can expect even greater savings, about $44 billion, from more optimal power systems operation, with a major role for gas as the main fuel for power generation, displacing expensive liquid fuels.
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This is one in a series of blogs by Jeff Delmon using the metaphor of marriage (or divorce) to explore the dynamics of public-private partnerships (PPPs) as relationships created between two parties.
“If all parties understood the other’s vantage point,” says the recently CP3P certified Francis Chukwu, “more deals would happen—facilitating more investment, and more successfully executed projects.”
Francis Chukwu had a distinguished career as an international project finance lawyer in Lagos, Nigeria, (with Aluko & Oyebode) and then in Paris, France, (with Clifford Chance) advising mostly equity investors and lenders before joining the World Bank Group’s Multilateral Investment Guarantee Agency (MIGA) in 2016. He was offered the chance to become CP3P certified through the APMG PPP Certification Program, and when he took the first Foundation-level exam he thought he could just go in and pass. Not so.
While the World Bank’s resources for low-income countries have never been greater, they still pale in comparison with these countries’ needs. Governments always need to make hard choices between infrastructure needs, social programs, and fiscal discipline. One country was recently able to strike the right balance with the support of World Bank guarantees: Benin.
A strange irony persists in today’s infrastructure investment market: private capital waiting to be deployed into the sector is at an all-time high, yet investors seem reluctant to commit. Even in developed countries, few investors are willing to partake in transactions with merchant or construction risks without taking a higher risk premium.
This can make the financing of infrastructure projects more costly—a challenge particularly acute in emerging markets where further investment risks abound.
Before diving into a new year, I like to take some time for reflection. This past year, I’ve seen a real shift in how public-private partnerships (PPPs) are perceived and understood—both their benefits and risks. Many governments are considering PPPs to help them deliver infrastructure and services their citizens need. They also better understand the complexity of PPPs as a procurement method and are more strategic in when to use them.
If so, what must be done to ensure they’re sustainable and deliver on public sector goals? Thinking back on 2018, I saw these developments:
Using Islamic finance for infrastructure development attracted more attention recently in the quest to maximize finance for development.
At the recent World Bank-IMF Annual Meetings in Bali, the World Bank and the Islamic Development Bank (IsDB) co-hosted a symposium on Islamic infrastructure finance, building on the institutions’ strategic partnership. As we note in Mobilizing Islamic Finance for Infrastructure Public-Private Partnerships, the asset-backed, ring-fenced, and project-specific nature of Islamic finance structures and their emphasis on sharing risks make them a natural fit for infrastructure public-private partnerships (PPPs).