Climate-Resilient Public Private Partnerships
This “Toolkit for Climate Resilient Infrastructure PPP” and the accompanying report “Improving Climate Resilience in Public Private Partnerships in Jamaica” are the result of an 18-month project of the Climate Change Division at the IDB in collaboration with the Public-Private Partnership team at Development Bank of Jamaica and IMG Rebel.
The aim has always been to provide DBJ’s PPP professionals and, ultimately PPP professionals in the Caribbean Region, with pragmatic, practical solutions to integrate the assessment of climate risks and resiliency opportunities in the preparation of infrastructure projects through Public Private Partnerships (PPPs)
The need to consider climate change issues in the provision of infrastructure services through PPPs originates from two key observations in the context of Jamaica, but easily extendible to other climate vulnerable countries in Latin America and the Caribbean: On one side, these countries face many risks associated with climate change, with their infrastructure stock vulnerable to hazard events like hurricanes and landslides, as well as to chronic slow changes as sea level rise and perturbations in temperature and precipitations patterns. At the same time, Jamaica and many countries as such have been seeking to develop and build its infrastructure with an increased role for the private sector, developing Public Private Partnerships models that are constantly evolving in the region. As very long-dated contractual relationships, the success of PPPs is highly dependent on an accurate, sustainable and efficient distribution of risks and benefits between the public and private counterparts of the transaction – risk distribution that could be significantly perturbated by climate change, making the task of structuring efficient 20-30 years PPP contracts incredibly difficult if those risks are not identified, assessed and managed throughout the whole process of structuring a PPP transaction.
The analysis for the report and toolkit has identified several instruments and tools already used to address climate change issues in the context of infrastructure production – albeit not always in a systematic way – that could be integrated in the PPP process in a more institutionalized and standardized manner, identifying options for a low-cost and seamless implementation in a Resilient PPP model. The Toolkit, finally, is to be considered a living document; we hope it could provide initial guidance to professionals implementing PPP projects in the region, while being open to improvements and updating as we collect evidence on other instruments that can be used to manage climate change risks and/ or create resiliency opportunities for the infrastructure of the Latin America and the Caribbean
