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

Public-private partnerships (PPPs) can sometimes be perceived as a means for delivering infrastructure for free. A more nuanced but still inexact view is that they are a mechanism to overcome fiscal constraints. Some argue, perhaps rightly, that often governments enter PPP contracts without fully understanding their fiscal implications. These misconceptions lead to several challenges. There is evidence that fiscal sustainability is often overlooked or ignored by countries with PPP programs, with long-term fiscal implications the governments did not understand or manage well.

Fiscal Risk in PPPs: Defining the Problem

The International Monetary Fund (IMF) and the World Bank have updated an important tool to help governments assess fiscal costs and risks arising from PPPs: the Public-Private Partnership Fiscal Risk Assess- ment Model (PFRAM) 2.0. The tool goes further to help governments manage PPPs proactively—so that identified risks are allocated, managed, and priced correctly—and, ideally, so that they don’t materialize. PFRAM has been in use since 2016 as part of IMF and World Bank technical assistance and has also been used by developing-country authorities working on these issues.

Assessing Fiscal Implications

This section describes in more detail the range of PPP contract types under the definition of PPP used in this Reference Guide; and some of the more common terminology used globally to describe PPPs.

Fiscal Accounting and Reporting for PPPs

This section describes in more detail the range of PPP contract types under the definition of PPP used in this Reference Guide; and some of the more common terminology used globally to describe PPPs.

Assessing Fiscal Implications of a PPP Project

This section describes in more detail the range of PPP contract types under the definition of PPP used in this Reference Guide; and some of the more common terminology used globally to describe PPPs.