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Leveraging PPPs in Mozambique to scale conservation and promote economic development

Elisson Wright's picture


THPStock | Shutterstock

Over the last few decades, Public-Private-Partnerships (PPPs) have been used to build transportation, energy, telecommunications, and other infrastructure throughout the world. Value chains were established to foster growth in these sectors and significant experiences gained. A sector largely overlooked for PPP investments is the tourism sector.

In 2016, travel and tourism generated $7.6 trillion (10.2 percent of global gross domestic product) and an estimated 292 million jobs globally. The tourism sector is also the largest market-based contributor to finance protected areas such as national parks. In some countries, tourism depends almost exclusively on natural systems, often with wildlife as the primary attraction.

PPPs and agriculture: driving India beyond the Green Revolution

Aman Hans's picture



India’s agriculture sector—including animal husbandry, forestry, and fishing—has always been one of the country’s core economic sectors, accounting for about 16 percent of India’s GDP and employing nearly half of the working population. Although India has the second largest arable land pool in the world, agriculture is still mired by challenges such as low effective yield and underemployment. Underinvestment in agri-infrastructure, fragmented land holdings, and lack of knowledge and skills among farmers, are some of the key causes. These challenges in turn have aggravated issues like inflation, farmer distress and unrest, political and social disaffection—all of which have severe socioeconomic ripple effects on other sectors. This significantly curtails the ability of India’s economy to touch double-digit growth. 

Let’s realize the potential of PPPs  

Malcolm Morley's picture


Photo: rawpixel.com | Pexels

If the potential of public-private partnerships (PPPs) is to be realized, joint working within the public sector and between the public and private sectors needs to be improved. 

Experience across the world has consistently identified that organizations find it difficult to effectively work together both within and across sectors. Issues of organizational objectives and priorities, individual and organizational sovereignty, status, power, resources, and culture act as barriers. This too often means that the potential outputs and outcomes from PPPs are not maximized.

What do private companies look for in a performance-based non-revenue water project?

Jemima Sy's picture



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.

Honduras launches new PPP disclosure portal

Giorgio Valentini's picture
Also available in: Español



This past spring, Honduras took an important step in improving transparency and accountability with respect to Public-Private Partnerships (PPP) by launching an online platform that allows public access to detailed information about these activities.

The portal, created with the support of the World Bank and in coordination with the Construction Sector Transparency Initiative (CoST), allows access to information related to PPP projects through their entire project cycle. This is a significant achievement that promotes transparency in PPP planning, procurement, implementation and monitoring in Honduras, by making information easily accessible to citizens.

Using guarantees to drive efficiency gains in road PPPs by reducing costs

Lincoln Flor's picture


Public-Private Partnerships (PPP) in transport infrastructure can offer significant efficiency gains compared to public procurement options—in the right circumstances. The gains accrue from allocating to the private sector those risks they are better able to handle than the public sector, such as those associated with construction costs.  

Data backs this up: findings in Construction Risk in Infrastructure Project Finance from EDHEC show that for a large number of transport infrastructure PPP projects, (including roads), construction overruns are significantly lower at 3.3 percent on average compared to public procurement projects, with a 26.7 percent overrun average.

Regenerative PPPs (R+PPP): Designing PPPs that keep delivering

David Baxter's picture


Photo: Misako Kuniya | Flickr Creative Commons

The time is ripe to explore innovative ways to implement PPPs through a synthesis of sustainable and resilient best practices that progressively improve delivery and outperform original expectations.
 
During my recent travels as a PPP advisor to Europe, the Middle East, and Southeast Asia, I worked closely with public sector leaders who are increasingly focused on procuring a new generation of PPPs that are meaningful, sustainable, resilient, people-focused, and will support their governments’ goals of achieving the Sustainable Development Goals (SDGs).
 
A government official from the Balkans had a concern about maturing PPPs in his country. Projects that had been launched at the end of communism were reaching the end of their lifetime and would be in a poor state when returned to the government by under-performing private sector partners who had not met their obligations to ensure the operations and maintenance would guarantee the government received back projects in good working order. Additionally, there was concern that if the perception arose that PPPs had resulted in “privatization of profits and nationalization of debts” that the potential for future PPP projects would be jeopardized.
 
These projects that could stop delivering once handed back to the public sector because of a lack of financial and human capital resources would set the country’s development agenda back—as it could not afford to build new projects and refurbish old ones at the same time.

What was needed were projects that continued delivering.

More and better infrastructure services: Let’s look at governance; financing will follow

Abha Joshi-Ghani and Ian Hawkesworth's picture


Photo: AhmadArdity | Pixabay 

There are many reasons why infrastructure projects often fail to materialize, meet their timeframe, budget, or service delivery objectives. Important examples include weak and insufficient planning and assessment of affordability as well as uncertainty over the rules of the game. 

These issues severely constrain the ability of governments to mobilize finance to deliver key services that help achieve the Sustainable Development Goals (SDGs). The World Bank estimates that achieving the SDGs would require some $4.5 trillion in public and private investment by 2030.

In light of the financing requirements for the SDGs, the World Bank has developed the Maximizing Finance for Development (MFD) approach to help governments and other stakeholders crowd in private sector solutions while optimizing the use of scarce public resources. The success of the MFD initiative will depend in large measure on whether good infrastructure governance practices and tools are adopted.
 
The World Bank Group and the African Development Bank, with support from key development partners, have organized the second Infrastructure Governance Roundtable, to be held in Abidjan, Cote d’Ivoire, June 21-22, to foster a robust dialogue on how best to improve infrastructure governance practices to create sustainable infrastructure, and to assist with building capacity in this area.

Infrastructure: Times Are a-Changin’

Laurence Carter's picture

Photo: Reychelle Ann Ignacio | Marketplace Designers 

Sometimes change creeps up on us. And we can step back and realize that the world is different. This rings true currently in the infrastructure space. Here are three examples:
  1. It’s now commonly agreed that we won’t achieve the Sustainable Development Goals without the involvement of private sector solutions: management, financing, and innovation. Involving the private sector is no longer an “if” question. We’re beyond ideology and calls for more aid transfers. Now we’re looking at “how”—and under what circumstances—crowding in private solutions help deliver better access to infrastructure services while being fiscally, environmentally, and socially sustainable.

    This is what the World Bank Group’s Maximizing Finance for Development initiative is about, for infrastructure and other sectors as well. Cameroon’s power sector is a good example, where sector reforms have been supported by public loans, which in turn have helped crowd in private and financing from development finance institutions (DFIs) for large investments like the 216 megawatt Kribi gas project.

Can good infrastructure decisions be made with little information?

Aditi Raina's picture



The simple answer is yes—with a little help from the Infrastructure Prioritization Framework developed by the World Bank.
 
Experts can make decisions based on remarkably few pieces of information. Research by James Shanteau at Kansas State University has shown that expertise is reflected in the type of information used, not the amount of it. The Infrastructure Prioritization Framework, or IPF, attempts to capitalize on precisely these aspects of expertise and decision-making. This enables objective evaluations of infrastructure projects using minimal but relevant data in information-constrained environments.
 
Why is this important? It’s easy to make decisions when complete information is available. But this is rarely the case in most developing economies, where policymakers must rely on limited data to make decisions. But this does not mean the resulting decisions have to be poor. Critical to such situations is the ability to identify and select accurate and relevant information to achieve the desired objectives, something that requires experience, expertise, and judgment. 

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