Kenya’s 3 keys to success: How to create an effective public-private partnership unit

Stanley K. Kamau is the Director of Kenya’s PPP Unit and is responsible for overall coordination, promotion, and oversight implementation of the country’s PPP program. Appointed in early 2010, he has been the driving force behind Kenya’s PPP agenda, overseeing the establishment and operationalization of a robust legal and regulatory framework, as well as an ambitious PPP pipeline.

I’m often asked what makes our PPP program here in Kenya so effective . The Kenya PPP program has emerged from the initial stages of building and strengthening the regulatory and institutional framework for PPPs at various levels, and has now moved on to the actual implementation of an ambitious project pipeline of currently 71 proposed projects. We’ve created a unit with some impressive successes, and much of it is because other nations shared their lessons with us along the way.  Now it’s our turn, and we’d like to impart the most important lessons learned to help other PPP units that may be struggling . 

The top three of the key factors to our PPP Unit’s growth are:

1. PPP Unit’s Governance and Reporting Structure: In performing our secretariat duties and day to day operations, we have a non-layered and direct reporting line to the PPP Committee and the Principal Secretary/National Treasury, respectively. This governance structure and our location within government has helped to ensure an effective engagement with other public sector parties and the market; that we exercised our authority with ease as the country’s guardian of the integrity of the PPP process; managed conflicts of interest; and benefited from skills, practice, and relationships of the other National Treasury departments. (In particular, this includes the Debt Management Office to assess and advise on fiscal commitment from a long-term liability management perspective; and the Directorate of Budget, Fiscal and Economic Affairs, which advises on fiscal commitment affordability from a budget priorities/constraints perspective, and supports us in painting an accurate macro-economic and fiscal forecast.)
2. Self-driven and passionate staff: Given that the main purpose of the PPP Unit is to be a source of specialist support within and outside government , the quality of its staff is paramount. Kenya’s PPP Unit is fortunate to have retained a high caliber staff who are fully committed to the cause . We tend to humorously refer to ourselves as an equal third party that is emotionally invested in the safe delivery of an impending birth (PPP project) and its eventual development into childhood, troublesome teenage years, settling into adulthood and the eventual passing on/re-birth. Key to this long-term commitment is continuity in support.  Since our formation in 2013, we have faced minimal staff turnover, which has helped to create the institutional memory that is vital during applications of lessons learned.
3. Financial Support from the World Bank: In 2013, the Government of Kenya received a credit of $40 million from the World Bank to assist it in creating a bankable pipeline of PPP projects. This support has gone toward creating the necessary capacity of the PPP Unit, strengthening the PPP institutions established under the PPP Act, and hiring transaction advisors for the first mover PPP projects.

Those are of course specific to our experience in Kenya.  But I can think of several more general and equally important lessons for other governments considering how to best transact PPP programs , and these transcend national boundaries:

1. There is need for comprehensive capacity building and awareness creation proceeding the rolling out of a PPP program in a country. In Kenya, there has been a visible link between growing capacity especially in contracting authorities and picking of momentum of our PPP program.
2. A stable legal and institutional framework as well as a country’s investment framework is critical in delivering successful PPP projects in a country.
3. A well-resourced (human and financial) PPP Unit, strategically placed within the government, is the greatest asset  in getting the PPP agenda moving in any country.
4. In the nascent stages of implementing a PPP program, selecting a few highly bankable projects is in many respects a winning strategy. A few highly successful PPP projects are perhaps the best “ambassadors” of a PPP program . Further, such projects allow many people in a country better understand the mechanics and benefits of PPPs, ushering the way for more bankable PPP projects.
5. Political will and support from the top levels of government is essential in any jurisdiction. PPPs mainly render public services, and at times require end user payments, hence the need for solid political support and commitment to galvanize citizenry support for a proposed project.

Finally, it’s important to remember that PPP expertise and capacity is built through hands-on experience - so yes, heed specialist advice, but do not be fearful of making mistakes. Knowing what not to do is in many cases even more important than knowing what to do.