When it comes to delivering improved, cost-effective infrastructure and services – a precondition for green growth – public-private partnerships (PPPs) are one way forward. At a recent event co-sponsored with the United Nations Development Programme (UNDP) in Doha, we shared our unique perspective on public sector efforts to attract and leverage private sector climate finance through PPPs.
Some key takeways from the event include:
- PPPs help tap new money for infrastructure: Since the 2008 financial crisis, governments have limited financial resources to devote to capital expenditures and expanded public services. Involving the private sector offers a solution.
- PPPs boost efficiency through cost savings and shorten delivery periods. They also spur innovation by bringing in private sector know-how.
- PPPs facilitate projects under one umbrella: When it comes to climate initiatives, PPPs can efficiently organize and consolidate the numerous and complex arrangements that make a renewable energy (or any other climate-related) project work.
- PPPs allow for appropriate allocation of supply and risk demand to the private sector, reducing taxpayer costs.
- Since 1989, IFC has been the only multilateral institution providing advice to national and municipal governments on designing and implementing PPP transactions to improve infrastructure and access to basic services such as water, power, agribusiness, transport, health and education. IFC also shared lessons learned from its own experience as the World Bank Group’s private sector arm.
One example that can and already is being replicated in South Asia and Africa is a solar rooftop project in Gujarat State, India. Gujarat, which is highly industrialized, committed to a long-term policy to reduce its carbon footprint. IFC helped the local government take its first steps toward making its capital, Gandhinagar, a model solar city.
Capitalizing on over 300 sunny days a year, Gujarat and its private sector partners will produce five megawatts of power entirely from solar photovoltaic panels installed on the city’s rooftops by 2013—a clean and efficient way to address the ever-increasing need for power in a rapidly growing country.
As discussions continue in Doha, policymakers can look at Gujarat as a model for how we can forge a new path. This path features governments and the private sector working hand-in-hand to offer innovative, efficient and cost-effective solutions to the challenges of climate change both in the developing world, and globally
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