PPPAmericas 2015: Taking public-private partnerships to the next level

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The Latin America and the Caribbean region is crying out for infrastructure improvements. An investment estimated at 5 percent of the region’s GDP — or US$250 billion per year — is required to develop projects that are fundamental for economic development. This includes not only improving highways, ports and bridges, but also building hospitals and creating better transport, public transit and other mobility solutions for smarter cities. Rising demand for infrastructure also is prompting countries to redouble efforts to attract greater private investment

At the Multilateral Investment Fund (MIF), as at the World Bank Group, we believe that public-private partnerships (PPPs) can help governments fill this infrastructure gap. However, the projects must be implemented effectively and efficiently to achieve social and economic objectives.

Governments in the Latin America and the Caribbean region not only lack financing to address the infrastructure gap, but also face challenges in selecting the appropriate large infrastructure projects, planning the projects, managing and maintaining infrastructure assets — and gaining public support for private investment in public infrastructure. 

However, PPPs are gaining ground in Latin America and the Caribbean. Beyond the larger economies of Brazil, Colombia and Mexico, assistance from the MIF and the Inter-American Development Bank (IDB) has enabled countries such as Paraguay to develop laws that pave the way for PPP projects. Just this week, Paraguay announced its first such project, which involves an investment of US$350 million to improve and build more than 150 kilometers of roads. 

PPPs have been moving beyond classic interventions in public infrastructure, which have typically included roads, railways, power generation, and water- and waste-treatment facilities. The next wave of PPPs increasingly involves and provides social infrastructure: schools, hospitals and health services. In Brazil, IFC, the private sector arm of the World Bank Group, helped create the Hospital do Subúrbio, the country’s first PPP in health, which has dramatically improved emergency hospital services for one million people in the capital of the state of Bahia.

Increasingly, the LAC region is seeing the PPP model applied in an array of green projects, such as renewable energy, which is highlighted in our latest Infrascope report on the national environments for PPPs in the region. The PPP framework represents a unique opportunity for governments to attract private-sector investment in domestic green industries, as well as to encourage the development of new approaches to mitigating environmental impact.

Together with the government of Uruguay, we at the MIF and the IDB are proud to bring you this spring the next edition of PPPAmericas, the largest conference on sharing best practices and trends in the preparation and financing of PPP projects.
 
The conference’s main theme is Scale and Credibility: Taking PPPs to the Next Level.  We will be diving into such issues as: 

  • How to select better projects, as well as make PPPs more fiscally sustainable and transparent;
  • How to improve on the recent generation of PPP laws and regulations across the region; and
  • How to deal with a surge in unsolicited proposals.
We hope you will join us at PPPAmericas in Punta del Este, Uruguay from April 14 to 16, to meet leading practitioners, policymakers, representatives of government and private-sector experts. Together, we hope to begin to answer the question of how to create a smarter generation of PPPs. 

Registration is now open at www.pppamericas.org.
 

Authors

David Bloomgarden

Lead Private Sector Development Officer, Inter-American Development Bank

Join the Conversation

Marcos Siqueira
March 16, 2015

The role of PPPs in the LAC region, as David points it, is indeed increasing and diversifying. Small economies and subnational governments alike are realizing the potential of private investment to promoter better infrastructure services.
The context in Brazil, for example, is simultaneously exiting and challenging. It is exciting because the PPP experience is very diverse in the type of projects and the stage of their development.
PROJECTS UNDER DEVELOPMENT PER SECTOR IN BRAZIL
Airport 8
Culture complex 11
Defence 7
Education 8
Energy 5
Parking 7
Football stadia 9
Rail Way 16
Public Housing 4
Street lights 23
Irrigation 1
Logistics 5
Environmental Assets 4
Mass transport 21
Multi-Business 17
Ports 5
Public Buildings 42
Solid Waste 43
Roads 26
Water/waste water 49
Health 29
Prisons 11
Technology 10
Urban Rail 24
Urban renewal 3
PROJECTS UNDER DEVELOPMENT PER STAGE IN BRAZIL
Preparation 63%
Public consultation 8%
Procurement 6%
Contract management 23%
Source:www.radarppp.com
This increased activity, however, creates challenges that are common to the entire region. The most important of those is the need to the development of institutional capacity of governments, so as to guarantee the projects effectively reach financial close and deliver the promised Value for Money. In this matter, the role Multilaterals is strikingly relevant. The MIF, for example, has been directly responsible for some of the most effective PPP programs in the region.
This is also why the PPP Americas is so important to the future of infrastructure in the region. It creates an ideal environment for peer-to-peer learning and for networking. As a participant of previous editions, it has always helped me to learn from practitioners around the region, and share valuable experiences that allowed me to design and manage more and better PPP projects.