PPPs in Infrastructure

Public-private partnerships in infrastructure can enable the development or improvement of energy, water, transport, and telecommunications and information technology through the participation of private and government entities. Where governments are facing aging infrastructure and require more efficient services, a partnership with the private sector can help foster new solutions, including clean technology.

PPPs combine the skills and resources of both the public and the private sectors in new ways through the sharing of risks and responsibilities. This arrangement allows governments to benefit from the expertise of the private sector and focus instead on policy, planning, and regulation by delegating day-to-day operations.

Achieving a successful partnership requires a careful analysis of the long-term development objectives and risk allocation. In addition, the legal

The Ouarzazate I Concentrated Solar Power (CSP) Project partially funds the construction of a concentrated solar power plant which supports the first phase of an ambitious Moroccan plan to expand the country's reliance on its domestic renewable energy sources. Morocco aims to increase the share of renewable energy in its energy mix to 42 percent by 2020. © World Bank / Dana Smillie (photographer). Permission required for reuse.

The Ouarzazate I Concentrated Solar Power (CSP) Project partially funds the construction of a concentrated solar power plant which supports the first phase of an ambitious Moroccan plan to expand the country's reliance on its domestic renewable energy sources. Morocco aims to increase the share of renewable energy in its energy mix to 42 percent by 2020. © World Bank / Dana Smillie (photographer). Permission required for reuse.

framework must adequately support this new model of service delivery and be able to monitor and regulate the outputs and services provided. A well-drafted PPP agreement is informed by both the laws of the country and international best practices to delineate risks and responsibilities clearly.

World Bank Group and PPPs

The World Bank Group provides support to client countries in their development of programs and projects for public-private partnerships through a number of different tools and mechanisms. It helps governments improve the enabling environments for PPPs and pursue sector reforms through technical assistance and, as part of broader sector support, through facilities that promote the development of PPPs. The World Bank Group also offers a number of knowledge management tools and collaborates on other initiatives that foster public-private partnerships. The Infrastructure Resource Center for Contracts, Laws, and Regulations, for example, gives a general introduction to PPPs, offers practical tools for the development of the legal enabling environment and regulation of PPPs, and provides sample and annotated contracts from various structures in private sector participation in infrastructure.

World Bank and PPPs

In addition to technical assistance and sector support, the Bank has provided innovative guarantee support for PPP projects, particularly in infrastructure, often in collaboration with IFC and MIGA.

IFC and PPPs

IFC's advisory services in public-private partnerships help national and municipal governments partner with the private sector to improve basic services, such as education, electricity, health, sanitation, and roads, as well as tackle today's most pressing issues like climate change and food security.

IFC has a number of financing mechanisms for supporting PPP projects, whether in their early stages, through lending to and equity participation in private sector operators in projects, through infrastructure funds and facilities supporting projects, and through guarantees.

As of June 2014, IFC had an active portfolio of 118 PPP advisory projects in more than 50 countries, valued at about $152 million. IFC helped governments sign 10 PPP contracts, including 6 in IDA countries. These partnerships are expected to improve access to infrastructure and health services for more than 1.6 million people and mobilize $306 million in private investment.

MIGA and PPPs

The private sector has an enormous role to play in helping countries keep their commitments to their citizens, whether on its own or in tandem with governments through public-private partnerships. Here, MIGA makes a significant contribution, by catalyzing foreign direct investment that supports economic growth, reduces poverty, and improves people's lives in places that need it most. The Agency has supported a number of PPP projects, particularly in infrastructure.

Public Sector Management

A fundamental role of the World Bank Group is working with the governments of client countries to enhance the effectiveness of country systems and institutions to address difficult institutional problems. The Bank Group has a number of instruments and initiatives that seek to address critical governance issues, from investment and development policy financing, to analytical and advisory services, research, and knowledge products. The Governance Global Practice is responsible for the World Bank's governance and public sector strategy. The practice focuses on building efficient, open, and accountable institutions and governance systems through knowledge generation, documentation of global best practices, and tangible, hands-on, implementation support to Bank Group clients.

 
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