Stephane July, Principal Consultant and Head of the Finance Desk at CPCS, contributed to Word Bank PPP blog. Sharing his thoughts on ways to better classify PPP in Africa.
It is broadly understood that public-private partnerships (PPP) are a procurement tool that encompass design, financing, construction and long-term operation of a public infrastructure by the private sector. They can be cost-effective thanks to adequate risk transfer and performance criteria, and help bridge Africa’s large infrastructure gap in many sectors.
For instance, this confusion can be found in the various and inconsistent uses of the word “concession.” In France and most francophone jurisdictions in Africa, a concession refers to a specific legal framework that defines a PPP arrangement where the concessionaire is paid by users and takes demand risk, whereas in many Anglophone African countries, a concession can describe any kind of PPP contract.
* Incidentally, acronyms combining Design, Build, Finance, Lease, Operate, Own, Maintain, and Transfer are as numerous as they are meaningless. They are often wrongly applied and never say much about the project’s critical structural issues.
Major efforts have been underway across the African continent, with the support of the World Bank Group, to increase private investment in infrastructure. For example, we at CPCS have been a key contributor to this exercise, having advised or currently advising the governments of Benin, Burkina Faso, Chad, Gabon, Guinea, Guinea-Bissau, Nigeria, and Senegal in strengthening their legal institutional frameworks for PPPs, as well as identifying and launching PPP projects.
Classifying potential PPP projects from the outset using the three criteria outlined above could help not only focus on the specific legal and institutional issues that are most relevant to the projects, but also on the viability issues that are critical to attracting private investors—which could include required government funding, the creditworthiness of national utilities or the financial capacity of users.
Disclaimer: The content of this blog does not necessarily reflect the views of the World Bank Group, its Board of Executive Directors, staff or the governments it represents. The World Bank Group does not guarantee the accuracy of the data, findings, or analysis in this post.