A public-private partnership (PPP) project typically involves financing from multiple sources, combining equity from the project company's shareholders with debt from banks or other financial instruments such as bonds.

This section offers an introductory overview of project financing, though it is not intended to serve as a comprehensive guide. It highlights mechanisms such as guarantees, including political risk insurance and credit enhancement, to support investors and lenders in mitigating risks and facilitating investment.

It also provides valuable resources on Asset Recycling and Innovative Revenues, including the Municipal PPP Framework, which features over 100 project summaries. These examples are designed to inspire local decision-makers with creative, scalable PPP opportunities that help towns and cities improve services and deliver infrastructure projects effectively. 

Additionally, the World Bank's Emission Reduction Program (ERP), aims to support developing countries in strategically engaging with the evolving global Emission Reduction Credit (ERC) markets. It helps these countries generate ERCs for sale in global markets and mobilize financing for such transactions.

Resources

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

This section provides materials on risk allocation and explores the various layers of public sector involvement and government support in PPP projects.

The PPP Reference Guide offers comprehensive guidance on each stage of developing and implementing a PPP project. It covers everything from project identification and screening, PPP development, and candidate selection, to drafting contracts and managing PPP contracts throughout the project life cycle. As an alternative approach to project origination, some governments also accept unsolicited proposals from private companies for PPP projects, as discussed in the section on Dealing with Unsolicited Proposals.

Additionally, you can explore various Risk Mitigation Mechanisms and products available in the market for project sponsors, lenders and governments. These include Guarantee and Risk Insurance Products offered by International Financial Institutions. For further insights, read the blog and the published Guidance Note on Guarantees. 

Resources

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

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.

Public-Private Partnership's (PPP) are compex long-term transactions affected by many areas of law, and a transparent and accountable legal and regulatory framework is necessary to build sustainable projects in line with public interest. This section offers comprehensive guidance on PPP projects, including resources on PPP contracts and practical advice on structuring and drafting key contractual clauses.

When planning and developing infrastructure projects, it is crucial to consider the existing legal, regulatory and social environment of the country:

• Alignment with National Laws: A project agreement, no matter how well drafted, may be unenforceable and/ or irrelevant if it is inconsistent with the country's laws and regulations.
• Legal and Regulatory Barriers: The existing laws/ regulations may prohibit or impede the proposed project and so the project may need to be adapted to fit within them.
• Institutional Reforms: It may be appropriate to embark on more fundamental reforms of the institutions in the country such as reform of the judiciary/ establishment of a regulatory regime.

The PPP Legal and Regulatory Framework section provides resources, case studies, and other materials addressing key issues related to existing laws and the legal environment for PPP and sector reform projects. It includes due diligence checklists, examples of legislation, and various forms of regulation. For detailed guidance, visit the World Bank resource, PPP Legal Frameworks, on developing sustainable PPP legal frameworks.

Additionally, explore the ASLF Legal & Institutional Frameworks in Africa: A comparative analysis, which offers a comparative and comprehensive analysis of the existing African legal and institutional PPP frameworks. 

PPI Database

The PPI Database, is a joint product of the World Bank Group and the Public-Private Infrastructure Advisory Facility, which seeks to identify and disseminate information on private participation in infrastructure projects in low- and middle-income countries. It highlights the contractual arrangements used to attract private investment, the sources and destination of investment flows, and information on the main investors. The data can be filtered by projects that include MDB support.

Case Studies

The World Bank’s Municipal Public-Private Framework Case Studies includes over 100 project summaries. These case studies can be browsed by Category, Country or Sector.  A list of projects and project summaries which use "Leveraging Regulatory Changes" as innovative sources of funding are included.

The Disruption and PPPs Section, provides five case studies that help governments in emerging economies understand the increasing impact of disruptive technologies on PPP infrastructure projects. These case studies offer practical examples from various sectors and countries, both develop and developing, with guidance on how to manage existing and design future PPP contracts. 

Resources

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

Mobilizing Private Sector Capital for Resilient, Inclusive, and Quality Infrastructure 

The World Bank Group's (WBG) Infrastructure Finance Learning program offers a comprehensive range of resources and tools to support infrastructure financing.

The program will leverage WBG know-how in mobilizing additional sources of funding and financing for infrastructure by involving private investors. It will feature the Guarantees Academy, the PPP Certification course, case studies, tools and materials, including the Public-Private Partnerships Resource Center, and the Private Participation in Infrastructure (PPI) database. 

Program Components:

The Infrastructure Finance Learning program is structured around four core components, each addressing a critical aspect of infrastructure finance:

• Addressing Infrastructure Gaps through PPPs
• Creating the Enabling Environment for Infrastructure Finance – including the legal, regulatory, and institutional environment to mobilize private capital for infrastructure
• Adopting Financing Instruments to Deliver Private Capital – including credit enhancement, insurance, guarantees and local currency finance
• Preparing Transactions to Meet Market Requirements and Achieve Best Value for Money

Target audience:

IFK is tailored for WBG public sector clients, including:

• PPP units
• Sector Ministries (e.g., Transport, Energy, Health)
• Planning and Finance Ministries
• Local Governments
• State-Owned Enterprises (SOEs) in sectors like utilities, finance, and construction
• Other stakeholders within the infrastructure finance ecosystem

 Sections 

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

Many risks associated with climate change will be felt hardest by lower income countries, as their ability to prevent and respond to the impacts of climate change is limited. Against this background there is an urgent need for the development and finance of climate-smart infrastructure solutions. PPPs potentially provide a useful framework under which the public and private sectors can pool and coordinate their financial and technological resources more efficiently.

The Public-Private Partnership Resource Center has a number of sections with resources, practical guidelines, case studies and toolkits to identify, assess, and mitigate climate-related risks and help assist the development of climate resilient infrastructure. 

Check out the Municipal Case Stories section for examples on disruptive events or see some examples below.  See Pandemics and PPPs to find out more.

Disruptive technologies present extraordinary opportunities for progress, with cleaner, more efficient, and more resilient infrastructure services. These opportunities should be seized and celebrated. However, changes from the status quo create pain points that must be carefully managed, in particular when long-term PPP contracts are structured based on a financial model on which financing relies. Unraveling such commitments has proven contentious and difficult.

The increasing number of global disruption raises many questions;

• How can private sector adoption of emerging technologies be supported within existing and future PPP projects?
• How can new technologies be harnessed to strengthen PPP projects going forward?
• Which parties should bear the burden of the risk of obsolete and stranded assets?
• And how can governments “future-proof” their pipeline PPPs?

The sections addresses these questions systematically by;

• defining disruptive technologies and their potential impacts on infrastructure projects and PPP contracts;
• outlining different policy options during the project development phase that encourage private sector adoption of innovative technology while improving resilience towards technological disruption; and
• discussing considerations for PPP contract management as well as future contracts to embed flexibility that allows for the integration of new technologies and accounts for technology disruptions that will inevitably occur.

To learn more visit the Executive Summary or the Sections below. 

Acknowledgements

The preparation of this report and the country case studies was led by the World Bank. The authors of this report are Jenny Jing Chao (Task Leader, Senior PPP Specialist) and Susanne Foerster (Consultant) from the Infrastructure Finance, PPP & Guarantees Group (IPG). The report was developed under the guidance of Fatouma Ibrahima (Practice Manager).

The country case studies benefited greatly from the valuable contributions and perspectives of James Harris, Fred Drap, Chris Melville, and Akshay Jaitly.

Peer review comments were gratefully received from Christina Paul, Jeffrey Delmon Mikel Tejada Ibanez, and Daniel Benitez.

The guidance was partly funded by the Public-Private Infrastructure Advisory Facility (PPIAF). PPIAF, a multi-donor trust fund housed within the World Bank, provides technical assistance to governments in developing countries. PPIAF's main goal is to create enabling environments through high-impact partnerships that facilitate private investment in infrastructure. For more information, visit www.ppiaf.org.

The Pandemics and PPPs section is intended to address issues which may arise as PPP contracts come under stress due to the impact of a pandemic. How can unforeseen events, such as Covid-19, affect PPP Projects and how to mitigate the risks.

Preparing for disruption starts well before the contract stage, during project selection and preparation, and in this section we highlight resources developed to share the lessons learned, and approaches that have been discussed including the implications for contractual arrangements. It also presents practice notes, case studies and insights that will help outline important considerations for governments in regard to managing PPP projects for a post-pandemic recovery. 

Bridging the infrastructure gap is essential to achieving the Sustainable Development Goals. To help governments make informed decisions about improving the access and quality of infrastructure services, including the use of public-private partnerships (PPP) as one delivery option, a series of tools to help governments have been developed. 

As each country has unique challenges, needs, and specific capacities to implement PPPs, it is up to each country to address its own opportunities and challenges and assess whether the local environment would enable or hinder a PPP. These tools will help governments work through this process and decide whether to proceed with a PPP or not. The advisory services of development partners can also provide expertise as well as peer-to-peer learning.

Tools to develop and prioritize infrastructure pipeline 

These tools can help governments develop a structured pipeline of infrastructure projects to be implemented, and sort them according to the priorities of the country. The advisory services offered by partner MDBs can also provide expertise as well as peer-to-peer learning opportunities. 

• Project Development Funds (PDFs)  - This Primer from The World Bank seeks to identify lessons learned and success factors that influence the design and operationalization of PDFs. It aims to paint a clear picture of how and why PDFs can support the development of PPP programs to assist policy makers in understanding whether a PDF can help to address their particular PPP program challenges. For practitioners, this Primer provides detailed information on PDF design features to assist them in establishing a PDF that will deliver on its objectives.
• Infrastructure Prioritization Framework (IPF) is a multi-criteria decision support tool that considers project outcomes along two dimensions – social-environmental and financial-economic.
• Infrastructure Resilience - The World Bank Group and Government of Japan established the Quality Infrastructure Investment (QII) Partnership to focus attention on quality dimensions of infrastructure in developing countries, particularly promoting disaster resilience.
• Guidelines for Applying Commercial Value Capture (CVC) in Infrastructure Projects - Governments should consider possible innovative funding opportunities during early planning processes and the project preparation stage, to ensure planning does not unnecessarily limit or overlook opportunities for capture Commercial Value Capture (CVC).
• Municipal Public-Private Partnership Framework - The World Bank’s Municipal PPP Case Studies collection includes around 100 Project Summaries with examples of commercial value capture in various sectors and from countries around the world.

Tools to design and improve the PPP framework

These tools can help governments assess whether their country has an adequate framework to process and implement PPPs. They include tools to assess a country’s institutional, legal and regulatory framework, as well as procurement and contract management capacity with the aim of implementing transparent, efficient, and sustainable PPP projects. These tools can also be used as guides to identify areas of improvement and implement reform. As each country has unique challenges, needs, and specific capacities to implement PPPs, each country should address its own opportunities and challenges to determine whether the local environment would enable or hinder a PPP. The advisory services of our MDB partners can also provide expertise as well as peer-to-peer learning opportunities. 

• Country PPP-Readiness Diagnostic Tool - This tool assesses whether a country is ready to implement PPPs by first reviewing the country’s PPP environment and then identifying areas for improvements based on global good practices.
• Businesses Of The State (BOS) and Private Sector Development Toolkit - The WB Private Sector toolkit presents a full spectrum of policy options. It explores how the private sector can play a stronger role in sectors with state participation, ranging from corporate governance reforms, restructuring, regulatory reforms, management contracts up to full or partial privatization.
• The Procuring Infrastructure PPPs 2018 report, along with the Procurement Framework and Regulations, provides key framework documents. The report assesses regulatory frameworks governing PPP procurement across 135 economies. By benchmarking good practices in four thematic areas, the resources aims to inform policy design and improve the governance and quality of PPP projects.
• A Framework for managing Government Guarantees - provides a checklist of ideas to consider when pursuing guarantees.
• Scenario Analysis Tool for Assessment and Monitoring of Government Guarantees: A Guidance Note -describes the methodology, gives examples, and gives directions on using the accompanying Excel models.
• Credit Rating Stylized Analytical Tool -The World Bank has developed a technical assistance (TA) package to assist governments in improving the management of explicit and implicit contingent liabilities from public corporations. 

Tools to assess whether to implement a project as PPP

Once a government develops and prioritizes its infrastructure pipeline, these tools can help identify the subset of pipeline projects that are compatible with PPPs. These tools will help governments work through this process to either proceed with a PPP or not. The advisory services of our MDB partners can also provide expertise as well as peer-to-peer learning opportunities. 

• PPP Fiscal Risk Assessment Model (PFRAM) - The PPP Fiscal Risk Assessment (PFRAM) Model, developed by the IMF and the World Bank Group, is an analytical tool to assess fiscal costs and risks arising from public-private partnership (PPP) projects. It is designed to assist governments in assessing fiscal implications of PPPs and managing these projects proactively.
• World Bank Group Debt and Fiscal Risks Tools - This toolkit provides a one-stop shop for public debt managers seeking guidance on how to assess, report and reform debt strategies in their countries.
• PPP Project Screening and Analytics Tool (PSAT) 2.0 is a Microsoft Excel Visual Basic–based decision-making tool that can be used by countries for screening and prioritizing climate resilient PPP projects. The tool was developed by the Infrastructure Finance, Public-Private Partnerships and Guarantees global practice (IPG) at the World Bank.
• Policy Guidelines for Managing Unsolicited Proposals - When it comes to infrastructure projects, “unsolicited proposals” (USPs) represent an alternative to the traditional project initiation method. In this approach the private sector, rather than the government, takes the leading role in identifying and developing a project. The guidelines provide a framework for public authorities to develop and implement sound USP policies that effectively address these challenges. You can also visit our self-paced course on managing Unsolicited Proposals in Infrastructure Projects. 

Tools to structure a sustainable PPP project

Once a government decides to implement a project as a PPP, these tools can help structure a sustainable project. Items to consider at this stage include how to allocate risks, design contractual provisions, assess fiscal risk, and conduct stakeholder consultations. These tools will help governments work through this process to design an efficient and sustainable PPP. The advisory services of our MDB partners can also provide expertise as well as peer-to-peer learning opportunities. 

• Managing the Fiscal Implications of Public-Private Partnerships in a Sustainable and Resilient Manner - A Compendium of Good Practices and Lessons learned from the COVID-19 Pandemic. The report aims to guide and inspire governments in the efficient and effective management of the fiscal exposure arising from public-private partnerships (PPPs), and intends to be a resource for World Bank client countries, including low income and fragile economies, to design their fiscal PPP management frameworks in a viable way that helps them develop their PPP programs while maintaining medium-to-long-term fiscal sustainability and resilience.
• Climate Toolkits - The Public Private Infrastructure Advisory Facility (PPIAF), The Global Infrastructure Facility (GIF), and International Finance Corporation Public-Private Partnership (IFC PPP) Transaction and Advisory Services have joined forces to build upon best practice on a topic at the crossroads of climate change, infrastructure, and private sector participation.
• Guidance on PPP Contractual Provisions - This document presents guidance on contractual provisions that can be found in virtually every PPP contract, taking into account feedback received during internal and external consultations with relevant public and private stakeholders.
• Allocating Risks in PPP Contracts - The GI Hub PPP Risk Allocation Tool serves as a reference guide for governments and other relevant stakeholders in deciding on the appropriate allocation of project risks in a given PPP project, as well as potential risk mitigation measures. The guide is made up of 18 annotated risk allocation matrices, each specifically tailored to a given project type (such as a road, airport, solar plant or hospital project).
• Framework for Disclosure in PPP Projects provides a systematic structure for pro-actively disclosing information regarding public-private partnership (PPP) projects. It can help client countries create effective policies and practices for public disclosure of PPP transactions. The tool was developed at the request of the G-20 and endorsed by them in 2015. A database on disclosure practices in various countries was also developed.
• Using PPP to Deliver Asset Recycling - The Asset Recycling Guidelines have been developed to support governments in selecting, preparing, and delivering asset recycling transactions, with a focus on long-term concession and lease models.
• The World Bank Group's climate and disaster risk screening tools - The World Bank Group's climate and disaster risk screening tools aim to identify and assess climate change risks. Identifying risks and proactively incorporating resilience measures at an early stage of project design can help projects achieve their development objectives.
• Resilience Rating System: A Methodology for Building and Tracking Resilience to Climate Change - To help guide investment decisions and improve climate resilience in project design and outcomes, the Resilience Rating System provides guidance and specific criteria to assess resilience along two complementary dimensions of project design - resilience of the project as well as resilience through the project.

Global Community Platform: ChatPPP

ChatPPP brings together the best and latest of technology to cater for a space to share insights, discuss questions and build relationships. Designed for government officials to ignite discussion, evoke debate, this forum provides a collaborative and safe space to help deliver better and sustainable infrastructure while leveraging on the best solutions from around the world.