One PPP Program, Two World Bank Group Teams, and the MIT


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The largest Public-Private Partnership deal in Central America was recently highlighted at one of the world’s most prestigious universities during the Massachusetts Institute of Technology’s (MIT) 9th Annual Sustainability Summit. Under this year’s theme, Funding the Future, the event brought together more than 300 participants from students, startup CEOs, academia, think tanks and financial investors.

The World Bank Group PPP highlighted at the MIT session is a proposed light rail train in Guatemala City with over $1 billion in capital expenditure. This PPP investment will improve transportation in Guatemala’s capital city for 260,000 passengers a day.  These are mostly out-of-town day laborers going to work at job center districts. It in an investment that will significantly reduce commuting time, boost quality of life, and raise income potential for the poorest of the poor. (Click here to see an image of the proposed light rail train.)
The project is a joint collaboration between two World Bank Global Practices (GPs): Transport & Information and Communication Technology and Trade & Competitiveness—and it has started to change PPP development in Central America.
Other projects receiving support from the World Bank Group’s PPP program include:

The Central America PPP program supports PPPs according to each country’s level of development , its needs, and specific issues on project and fiscal sophistication. 

The program in a nutshell

This program is divided into three basic pillars: Training, Institutional Strengthening, and Pipeline Development
Training is offered to all six countries in the region, attracting more than 40 senior Minister of Finance staff. The first training event was focused on Value for Money, Contingent Liabilities pricing and the PPP Fiscal Risk Assessment Model (P-FRAM)—an International Monetary Fund (IMF)-developed fiscal impact financial model.
Institutional strengthening helps Ministry of Finance staff implement financial instruments presented at the training events. It also improves policy dialogue with government officials and stakeholders for and against PPPs.
Pipeline development: the Bank Group and its regional partner, the Central American Bank for Economic Integration (CABEI), is working with a global consulting firm with significant PPP experience to find the best projects to build a deal pipeline for the medium term, so when current deals come to closure, governments can launch a sustainable stream of deals whose features, risks and returns are easily understood by market players and investors alike. 
This two-GP program has the broad support needed both internally within the World Bank Group and with strong external partners to leverage resources and boost impact. The U.S. government’s Millennium Challenge Corporation (MCC) is providing $20.5 million in grants to support feasibility studies and transaction fees for three Central American countries; CABEI has provided support in the region; the IMF has helped with knowledge events; and the Inter-American Development Bank is funding feasibility studies in Nicaragua.
The GPs have worked with the International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA), IFC PPP advisory, and IFC regional heads in Nicaragua, Honduras, El Salvador and Guatemala. MIGA is considering providing a financial guarantee critical to turn the Guatemala light rail train into a real investment. Finally, the Public-Private Infrastructure Advisory Facility (PPIAF) has provided funds for this ambitious program.

Next steps

The World Bank Group team has been called upon to help build and strengthen PPP agencies, laws, regulations, institutions and initial studies for transactions. The team conducts field visits as appropriate. The team will deliver the second PPP training for all countries in the region in Tegucigalpa, Honduras, June 5-9, 2017. Policy dialogue missions in several countries will follow the regional training until the end of this fiscal year.
All that work is the reason why the Bank Group is getting attention from the top academic institutions in the world, including MIT.
You can read more here about the session on PPPs in Sustainable Finance at the MIT summit.

Join the Conversation

Dr. Mohamed Taher Abdelrazik Hamada,Ph.D
May 18, 2017

Market players should be represented from both private and public sectors. They should be operated according to the policy of the assigned state that designs the market policy according to the ability of the financial system of this chosen state. Investors must follow the directions of the market players to avoid any risks that may occur in the market. They should be provided with the feasibility studies, including initial studies for the transactions. This comes through field visits from the investors and the market players to the sites of the investment that are supervised by the state authorities.

May 18, 2017

Good write up.

Ifeanyi Ukpabi
May 19, 2017

World bank should consider PPP trainings and deals with State governments in Nigeria.Lagos State with 20 Million population requires a robust transport system,low cost housing,electricity,sanitation and water projects.Mega projects sited in this city through PPP arrangement can pay itself in shortest possible time.

Yahuza Umar Adam
May 19, 2017

Thank you very much. I would like to be among the participants in your future programs. And one day I hope to be among the top international donor in every UN and it's like programs. Thank you!!!

Primer Pgunuran
May 20, 2017

This is informative research in the area of PPPs.

richard rwatooro baguma
May 21, 2017

These are good initiatives but am saddened such is a far from near call for our country uganda and the eastern africa region excluding ethiopia for obvious reasons. Kenya has put its act together on completion rates but mother Uganda is even yet to consider compensation for people whose property is going to be affected by the standard gauge railway project.
Are these chinese methods of work? Just asking. Consider our region in your plans.

Md.Ashraul Huda
June 04, 2017

I am interested to work on the public & private partnership basis. I have the experiences, I know where is the demand, only the detail information may be helpful to work together.
I would like provide another alternative e-mail address, like [email protected]
The detail information is required.
With thanks and regards.
Md. Ashraful Huda

Felicia Yetunde
June 23, 2017

I will be interested in this program. I am a post-graduate student of the University of Ibadan, Nigeria at the Department of Aquaculture and Fisheries Management, in the Faculty of Agriculture and Forestry.
My research interest is on post-harvest losses and quality assurance system in Ilaje fishing communities of Ondo state, Nigeria. Thank you