PPP Project Preparation

Understanding and implementing a systematic process is crucial for preparing bankable Public-Private Partnership (PPP) projects. 

PPP contracts often have financial implications for governments, involving long-term payment commitments that may be contingent on various risk. Managing these risks can create challenges for public financial management, which is generally geared to annual appropriations for expenditure. To address this, PPP-specific approaches to public financial management have been developed,  focusing on understanding and mitigating the different categories of risk inherent in PPPs. This systematic approach helps structure successful PPPs, and the WBG Infrastructure Finance Academy provides access to a range of resources and materials, including resources on Project Preparation Funds and Project Preparation Facilities (PPFs) with links to organizations, initiatives, and institutions that support the development of bankable, investment-ready projects.

Project Preparation Facilities (PPFs)

Project Preparation Facilities (PPFs) are important for improving the quality of PPP project development and ensuring that projects are investment-ready. An example of this is the Global Infrastructure Facility (GIF), a global platform that supports the preparation and structuring of complex infrastructure PPPs. The platform facilitates collaboration among multilateral development banks (MDBs), private investors, financiers, and governments in emerging markets and developing economies. By combining funding with a team of technical experts, the GIF enhances the capabilities of client governments and MDB partners, addressing capacity gaps and ensuring successful project outcomes.

The MDBs have also established PPFs to improve project development quality and strengthen local capacities. These facilities promote regional policy dialogue on infrastructure challenges, catalyze access to public and private finance, and support sustainable infrastructure projects, particularly PPPs. Some PPFs include:

• African Development Bank, Africa50
• Asian Development Bank, Asia Pacific Project Preparation Facility
• European Bank for Reconstruction and Development, Project Preparation Facility
• Inter-American Development Bank, Infrafund
• Islamic Development Bank, Arab Financing Facility for Infrastructure

Project Funds

Project Development Funds (PDFs) are dedicated vehicles that governments create to systematically support the preparation of  PPPs. A common challenge in many PPP programs is the lack of adequate and consolidated resources for evaluating and preparing potential projects, which limits their ability to attract private investment.

PDFs address this challenge by providing centralized and dedicated funding for PPP project preparation, independent of the typical constraints of government budgeting processes. These funds have contributed in the successful implementation of PPP projects, which can serve to support the increased private investment, critical for achieving the United Nations Sustainable Development Goals (SDGs). For more information, explore the primer on project development funds.

Case Studies

The Innovative Revenues for Infrastructure Guidelines (IRI) provide more than 100 case summaries of commercial value capture across various Category, Country or Sector. Visit the World Bank Municipal Public-Private Framework Case Studies, providing valuable insights into successful PPP projects.

Resources

Explore the sections below or search our Library for resources on Infrastructure Finance and PPPs.