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Private Sector Development

The experience dividend for PPPs

Darwin Marcelo's picture


Photo: Gustave Deghilage | Flickr Creative Commons

Does experience in implementing Public-Private Partnerships (PPPs) reduce a country's chances of contract failure?
 
In a recent study entitled Do Countries Learn from Experience in Infrastructure PPPs, we set out to empirically test whether general PPP experience impacts the success of projects—in this case, captured by a project's ability to forego the most extreme forms of failure that lead to cancellation.

A timely report on mobilizing Islamic finance for PPPs

Clive Harris's picture
Also available in: Français | العربية


Photo: Artit Wongpradu / Shutterstock.com

Islamic finance has been growing rapidly across the globe. According to a recent report by the Islamic Financial Services Board, the Islamic finance market currently stands around $1.9 trillion. With this growth, its application has been extended into many areas — trade, real estate, manufacturing, banking, infrastructure, and more.
 
However, Islamic finance is still a relatively untapped market for public-private partnership (PPP) financing, which makes the recent publication Mobilizing Islamic Finance for Infrastructure Public-Private Partnerships such an important resource, especially for governments and practitioners.  

تقرير محكم التوقيت عن تعبئة التمويل الإسلامي للشراكات بين القطاعين العام والخاص

Clive Harris's picture
هذه المدونة متوفرة باللغات التالية: Français | English

Photo: Artit Wongpradu / Shutterstock.com

 

شهد التمويل الإسلامي نموا سريعا في جميع أنحاء العالم. ووفقا لتقرير صدر مؤخرا عن مجلس الخدمات المالية الإسلامية، فإن سوق التمويل الإسلامي يبلغ حجمها حاليا حوالي 1.9 تريليون دولار. مع هذا النمو، تم توسيع تطبيقه في العديد من المجالات -التجارة والعقارات والتصنيع والخدمات المصرفية والبنية التحتية، وغير ذلك كثير.
 
ومع ذلك، لا يزال التمويل الإسلامي سوقا غير مستغل نسبيا لتمويل الشراكة بين القطاعين العام والخاص، مما يجعل التقرير الصادر حديثا بعنوان تعبئة التمويل الإسلامي لشراكات البنية التحتية بين القطاعين العام والخاص مصدرا مهما، وخاصة للحكومات والممارسين.
 

Helping Brazil realize its infrastructure promise

Paul Procee's picture


Photo: LWYang | Flickr Creative Commons

Since the 1980s, investment in Brazil’s infrastructure has declined from 5% to a little above 2% of the country’s Gross Domestic Product (GDP), scarcely enough to cover depreciation and far below that of most middle-income countries (see figure below). The result is a substantial infrastructure gap. Over the same period, Brazil has struggled with stagnant productivity growth. The poor status of infrastructure is broadly believed to be a key reason for Brazil’s growth malaise.

Building on success: PPPs in a new era of Canadian infrastructure

Mark Romoff's picture

Also available in françaisلعربية 


Photo: Hubert Figuière | Flickr Creative Commons

Canada has quietly become a leading player in the global PPP space. The unique Canadian version of the procurement model has evolved from an innovative idea promoted through the wisdom and passion of a few early believers and visionaries into a widely applied approach, embraced by all three levels of government and in every region of the country.
 
What might seem an “overnight success” has, in fact, taken 25 years of listening and learning to develop a smart, innovative, modern approach to infrastructure and service delivery using Public-Private Partnerships. It’s an approach that ensures real value for tax dollars and the efficient use of precious public resources.

A decade of PPPs in Latin America and the Caribbean: What have we learned?

Roland Michelitsch's picture

Also available in: EspañolPortuguês


Photo (right): Mr. Amarin Jitnathum / Shutterstock

The Latin America and Caribbean region (LAC) has an infrastructure gap: the region needs to invest at least 5% of GDP to cover its infrastructure needs, but is currently investing only half that. To put it mildly, there is still a lot of room for improvement for both the public and private sectors, and also for multilaterals working in the region.

In a combined effort to reduce infrastructure gaps, Public-Private Partnerships (PPPs) have become, again, a popular tool since 2005. LAC was the predominant region for PPPs until the late 1990s, when investments plummeted due in part to a backlash of poorly-implemented PPPs.

Triggered by low commodity prices and rising fiscal deficits, as well as by improvements in PPP readiness, many countries established dedicated agencies and strengthened regulations leading to increases in PPP investments from $8 billion in 2005 to $39 billion in 2015. In total, LAC has seen investments of $361.3 billion in around 1,000 PPP infrastructure projects in just one decade, mostly in energy and transport.

Una década de alianzas público-privadas en América Latina y el Caribe: ¿qué hemos aprendido?

Roland Michelitsch's picture

Esta página en: English | Português


Foto (derecha): Amarin Jitnathum / Shutterstock

La región de América Latina y el Caribe registra una brecha de infraestructura: necesita invertir al menos el 5 % del producto interno bruto (PIB) para atender sus necesidades en ese sector, pero actualmente invierte solo la mitad de ese porcentaje. Por decirlo de manera suave, los sectores público y privado y las entidades multilaterales que operan en la región aún tienen mucho que mejorar.

A partir de 2005, y gracias al esfuerzo conjunto de estos actores, las alianzas público-privadas (APP) volvieron a ser una herramienta ampliamente utilizada. Hasta fines de la década de 1990, América Latina y el Caribe era la región en la que más proliferaban estos mecanismos. En ese momento, las inversiones se desplomaron debido en parte a las reacciones adversas provocadas por la implementación deficiente de las APP.

Impulsados por la disminución del precio de los productos básicos y el aumento del déficit fiscal, así como por la mejora de las condiciones para implementar APP, muchos países establecieron organismos específicos y fortalecieron las regulaciones, con lo que las inversiones mediante APP crecieron de USD 8000 millones en 2005 a USD 39 000 en 2015. En total, en apenas una década, la región de América Latina y el Caribe ha registrado inversiones de USD 361 300 millones en alrededor de 1000 proyectos de infraestructura enmarcados en APP, mayormente en los sectores de energía y transporte.

Uma década de PPPs na América Latina e Caribe: O que aprendemos?

Roland Michelitsch's picture

Also available in: Español | English


Foto (direita): Amarin Jitnathum / Shutterstock

A região da América Latina e Caribe (ALC) apresenta uma lacuna em termos de infraestrutura: a região precisa investir no mínimo 5% do PIB para atender suas necessidades neste setor, mas atualmente investe apenas metade desse percentual.  Explicando de uma forma suave, há ainda muito espaço para melhorias por parte do setor público, do setor privado, bem como das organizações multilaterais que trabalham na região.

Em um esforço combinado de reduzir as lacunas de infraestrutura, as Parcerias Público-Privadas voltaram a ser uma ferramenta popular a partir de 2005. A ALC era a região com maior predominância de PPPs até o fim dos 1990s, quando os investimentos despencaram em parte como reação adversas provocadas por PPPs mal implementadas.

Incentivados pelos preços baixos dos produtos primários e déficits fiscais crescentes, assim como pelo aprimoramento da capacidade de preparação de PPPs, muitos países criaram agências específicas e fortaleceram regulamentações que levaram ao aumento de investimentos em PPPs de US$ 8 bilhões em 2005 para US$ 39 bilhões em 2015. No total, em apenas uma década, a ALC teve investimentos de US$ 361,3 bilhões referentes a aproximadamente 1000 PPPs de projetos de infraestrutura, principalmente nos setores de energia e transportes.

Coming together is the way forward: Maximizing Finance for Development

Hartwig Schafer's picture
Also available in: Español



Those following the discussions during the IMF and World Bank Group Annual Meetings held in Washington last week will have noticed that our approach toward international economic development is changing in a major way—and, I believe,  for the better.
 
Saturday’s panel discussion on Maximizing Finance for Development set the context that many in the development community now know well, but bears repeating: It will take not billions, but many trillions of dollars to meet rising aspirations for better infrastructure, health and education. Specifically, we are talking about $4 trillion every year needed to meet the Sustainable Development Goals to which the international community agreed in September 2015.

Slight bump in half-year private investment in infrastructure: a sign of recovery?

Cledan Mandri-Perrott's picture



With the World Bank Group focusing on maximizing finance for development, understanding the role of private participation in infrastructure is drawing a lot more attention.

In emerging markets and developing countries, the largest source of infrastructure investment is still domestic public spending. However, government budgets are tight, so crowding in private finance is necessary to meet large infrastructure needs. The World Bank has a tool to help understand private investments in infrastructure in the developing world: the Private Participation in Infrastructure (PPI) Database. With 27 years of data on PPI investments in emerging markets, the PPI Database can tell us a lot about development, challenges, and trends in infrastructure investments.

Whilst the enthusiasm for private sector participation in infrastructure gains pace, it is also important to look at the trajectory of PPI over the past decades. The numbers are, in fact, quite sobering.

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