Photo: Jakob Montrasio | Flickr Creative Commons
Getting to commercial close on a Public-Private Partnership (PPP) transaction is a major milestone. But the deal is far from done. Getting from commercial close to financial close involves satisfying a long list of PPP contract Conditions Precedent, the terms, and conditions of lenders, among other requirements. The process is tricky and involves a lot of heavy lifting, particularly in emerging markets where the market for PPPs and supporting institutional structures may not yet be robust. None of this is news.
Yet CPCS has experienced this firsthand as transaction advisors advising governments on PPP deals in developing economies.
Tomorrow, on December 12, 2017, exactly two years after the signing of the historic Paris Agreement, the government of France will be hosting the One Planet Summit in Paris to reaffirm the world’s commitment to the fight against climate change.
At the summit, mayors from cities around the world, big and small, will take center stage with heads of state, private sector CEOs, philanthropists, and civil society leaders to discuss how to mobilize the financing needed to accelerate climate action and meet the Paris Agreement goals.
Photo: kupicoo/ iStock
A key challenge when developing a policy to manage unsolicited proposals (USPs) in infrastructure projects is to strike a balance between receiving submissions and creating competitive tension. In a previous blog, we warned that USPs should be used with caution as an exception to the public procurement method, and argued that a good policy to manage USPs can help ensure transparency and predictability, and protect the public interest.
Surely a government that decides to consider USPs and develops a policy to manage them will look forward to receiving compliant proposals. At the same time, the government should ensure the project represents a fair market price and delivers value for money. Yet what is the incentive for the private sector to submit an unsolicited bid if the government takes it and competitively procures it? How can a government make USPs appealing to the private sector while attracting enough competing bidders?
It’s not always easy to convince the private sector to participate in public infrastructure projects—especially in developing countries and emerging economies. Why is this a problem? Because there simply is not enough public money to meet the growing demand for infrastructure, which is a key element of development and poverty alleviation. The need is great, numbering in the trillions of dollars.
But there is good news—the market has both the trillions and the expertise to use it, if the conditions are right. And the World Bank Group has a number of instruments that can help create an environment that meets the needs of the private sector in financially, environmentally, and socially sustainable ways. Guarantees are one of those instruments, a tool that is highly effective in leveraging limited resources for mobilizing commercial financing for critical infrastructure projects.
Image: chombosan / Shutterstock
According to NASA, 16 of the 17 warmest years on record have occurred since 2001. So—with climate change high on the global agenda—almost every nation signed the 2015 Paris Agreement, the primary goal of which is to limit the rise in global temperatures to below 2°C above pre-industrial levels. However, with the acute effects of global warming already being felt, further resilience against climate change is needed.
To meet both mitigation and adaptation objectives, “green infrastructure” can help.
Photo: Diana Susselman | Flickr Creative Commons
I worked with the International Finance Corporation (IFC) for exactly 20 years, all of which was in advisory work. I spent five years in Barbados, five in Washington, five in Zimbabwe and five in South Africa: perfect symmetry. On my 20th anniversary, I took a package and returned home, to the beautiful Caribbean. IFC was a great place to work, where we were challenged every day to come up with innovative solutions to seemingly intractable problems. Some of our deals were truly groundbreaking and lived up to IFC’s motto to improve people’s lives. That’s the kind of job satisfaction that money can’t buy.
After 76 countries, millions of air miles, and some pretty forgettable airport hotels, sometimes I look back and think: what was it all about?
But, what happens when the palm tree is cut or when the street vendor changes the location?
The absence of street names poses not only challenges for orientation, but also for property tax collection, postal services, emergency services, and the private sector. Especially, new economy companies, such as Amazon or Uber, depend on street addressing systems and are eager to cater to market demands of a growing middle class.
To address these challenges, the Accra Metropolitan Assembly (AMA), financed by the World Bank’s second Land Administration Project , is implementing a street addressing and property numbering system in Accra. Other Metropolitan areas received funding from other World Bank-funded projects for similar purposes.
Welcome to the “10 Candid Career Questions” series, introducing you to the infrastructure and PPP professionals who do the deals, analyze the data, and strategize on the next big thing. Each of them followed a different path into infra and/or PPP practice, and this series offers an inside look at their backgrounds, motivations, and choices. Each blogger receives the same 15 questions and answers 10 or more that tell their career story candidly and without jargon. We believe you’ll be as surprised and inspired as we were.
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.
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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.