Five ways PPPs deliver impact

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Aerial shot of the Tibar Bay port in Timor-Leste built through a Public Private Partnership between the government, the International Financial Corporation and Bolloré Africa Logistics
By partnering with the private sector through PPPs, governments are paving the way for a seamless integration of ports and logistics, unlocking efficiency and innovation. Photo source: Shutterstock.

The world’s infrastructure needs are enormous. Nearly 675 million people have no access to electricity. About 2 billion people don’t have safe drinking water. And 2.7 billion people—roughly one-third of the global population—remain unconnected to the Internet.

As we head into COP28 in Dubai, the World Bank Group’s vision for a livable planet supported by climate-resilient infrastructure takes on more urgency. I believe this is also the moment for public-private partnerships (PPPs), a mechanism that has proven to accelerate the building of sustainable infrastructure by allowing governments, the private sector, and multilateral institutions such as the World Bank Group to work closely together.

I have seen the impact of PPPs firsthand. At IFC—often working with our colleagues at the World Bank and MIGA—we have helped governments successfully deliver projects such as for public transportation, renewable energy, and hospitals. It’s humbling to see governments find ways to improve people’s quality of life and create jobs by tapping into the resources, expertise, and innovations of private enterprises. I see five ways PPPs can deliver even greater impact for people and our planet .   

  1. Do more with less

Developing countries face significant financing gaps that constrain their ability to invest. By partnering with the private sector through PPPs, governments can do more with less.   

Take Tibar Bay port in Timor-Leste. The government calculated it would have to spend $1 billion to build a new port. Instead, the government worked with IFC to design a PPP. Bolloré Africa Logistics, a global logistics company, invested $150 million in the first stage of the port’s construction, with the government only contributing $130 million. Today, Tibar Bay port is fully operational, benefiting people and the economy.    

     2. Share risk to make projects bankable

Properly designed PPPs help the public and private sectors share risks so governments don’t have to bear the entire burden.   

The Clean Ganga project is rejuvenating the Ganges River in India, improving people’s health and livelihoods. Under a hybrid-annuity model, the government paid 40 percent of the project costs as construction milestones were met. The remaining 60 percent was paid to the private concessionaire over 15 years, along with operation and maintenance expenses, as performance targets were met. 

This approach allowed for the simultaneous implementation of a number of projects, because the government didn’t have to pay all costs up front. More importantly, it created a structure to ensure accountability and optimal performance over the life of the project. The World Bank also provided more than $1 billion on the public sector side.

The IFC and World Bank team helped the government find creative ways to boost revenue for bidders, increase the bankability of projects, and ensure their operations are sustainable. The project has helped curb pollution and strengthen the sustainable management of the river basin, home to over 500 million people.  

    3. Improve public service delivery

Governments, by definition, govern. However, they sometimes struggle to deliver water, healthcare, and education services that are essential for the greater good of society. PPPs can help governments expand access to these services .  

In Uzbekistan, IFC worked with the government on the country's first health PPP, which is providing life-saving dialysis care for over 1,000 patients across the country. Recipient of the IJGlobal ESG Social Infrastructure Award, this PPP also introduced peritoneal dialysis to Uzbekistan, which has extended the reach of dialysis to patients in rural and remote areas. 

    4. Boost infrastructure resilience to climate change

Some governments have successfully incorporated innovative climate mitigation measures in their infrastructure PPPs, moving them closer to meeting their Paris Agreement goals.   

With $575 million in private investment, India’s 750MW Rewa Ultra Mega Solar PPP has reduced greenhouse gas emissions by 1 million tons a year since becoming operational. The state government of Madhya Pradesh further enhanced the solar park’s resilience to climate change by installing drainage at the site, which tended to flood under extreme weather conditions. Building on this success, a second round of solar projects totaling 1,500 MW is being built, having mobilized $590 million in private investment. A third set totaling 1,400 MW, which blends solar power with wind power and energy storage, is currently under preparation. 

    5.  Improve gender equality and economic inclusion

PPP projects can bolster gender equality and economic inclusion by incorporating standards to ensure development gains reach women, youth, and underserved or marginalized communities.   

In the Solomon Islands, IFC helped the government develop a PPP to build and operate a hydropower facility on the Tina River. Once completed, it will lower electricity costs and reduce the country’s greenhouse gas emissions by 2.5 times its 2025 target. Working closely with the World Bank, IFC helped the government develop an innovative benefit-sharing scheme to boost inclusion, allowing project royalties to be shared with more than 4,000 people living around the Tina River

In these five ways, we can tap into the power of PPPs to achieve development impact in a more inclusive and sustainable manner, benefiting people and the planet.  But we know we cannot address today's complex development challenges on our own. We are counting on everyone—government officials, civil society organizations, community leaders, private sector investors, and development partners—to join us. Together, we can and must deliver. 

Emmanuel Nyirinkindi is IFC’s Vice President of Cross-Cutting Solutions. 


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