Building Sustainability:Partnerships and Finance track 4

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What are the existing mechanisms and limitations faced by public and private sector in developing countries in establishing sustainable partnerships?

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  • GEF has been supporting a limited number of projects directly engaging the private sector. Nevertheless there are a number of lessons learned which have been shared among project managers, government representatives and implementing agencies. GEF could play a key role in supporting developing countries to design and delivery innovative mechanisms in the public-private partnership process.
  • Existing bidding and negotiation mechanisms set by the public sector for establishing public-private partnerships are not efficient due to inadequate objective ranking and selection criteria, unrealistic risks and rewards concepts
  • GEF could play a key role in supporting developing countries to design and delivery innovative mechanisms in the public-private partnership process. Those mechanisms should aim at building i) governance of the system (partnership); ii) strong ownerships of project; iii) capacity in identification of feasible projects; iv) financing schemes combining loan and grant. The private-public partnership process should involve national banks, private sector, GEF and other donors.
  • Building Sustainability:Partnerships and Finance track 4

    1. 1. Track 4 Building Sustainability: Partnerships and Finance Global Environment Facility –Global Environment Facility – International WatersInternational Waters Second Biennial ConferenceSecond Biennial Conference September 25-29, 2002September 25-29, 2002 Dalian, Lianing Province, ChinaDalian, Lianing Province, China
    2. 2. Key Issues  What are the existing mechanisms and limitationsWhat are the existing mechanisms and limitations faced by public and private sector in developingfaced by public and private sector in developing countries in establishing sustainable partnerships?countries in establishing sustainable partnerships?  Should GEF resources be used to support PrivateShould GEF resources be used to support Private Sector, Directly or Indirectly?Sector, Directly or Indirectly?  What kind of alternative delivery mechanisms forWhat kind of alternative delivery mechanisms for environmental infrastructure and services should beenvironmental infrastructure and services should be considered?considered? Sharing experienceSharing experience
    3. 3. Public-Private Partnerships: Existing Barriers Public Sector (National/local government, civil society): • Lack in managerial and technical skills • Existing bidding and negotiation mechanisms are not efficient due to inadequate objective ranking and selection criteria • Difficult to access to direct loans guarantees • Weak community participation and ownership Private sectorPrivate sector (national and international investors(national and international investors and banks):and banks):  Weak national financing capacityWeak national financing capacity  Lack of capacity in identificationLack of capacity in identification of bankable projectsof bankable projects  Environmental costs and criteriaEnvironmental costs and criteria are not internalized into businessare not internalized into business investment decision-makinginvestment decision-making
    4. 4. GEF support to sustainable “PP”GEF support to sustainable “PP” partnershipspartnerships    -- Financing the development of a transparent, balanced and serviceFinancing the development of a transparent, balanced and service oriented partnerships: strong ownership, long-term, shared information,oriented partnerships: strong ownership, long-term, shared information, stakeholders participation, quicker decision making, early collaborationstakeholders participation, quicker decision making, early collaboration and consultationand consultation ((PEMSEA projectPEMSEA project )) -- Building the climate for investments: strengthening legal andBuilding the climate for investments: strengthening legal and institutional framework as a basis for political commitment and jointinstitutional framework as a basis for political commitment and joint actionsactions ((Danube and Black Sea Programmes)Danube and Black Sea Programmes) -- Creating local capacity within the national private sector (industry andCreating local capacity within the national private sector (industry and consultancy) in identification of pollution prevention opportunities andconsultancy) in identification of pollution prevention opportunities and fundingfunding Pre-Investment studies for Environmentally Sound TechnologiesPre-Investment studies for Environmentally Sound Technologies ((TEST project)TEST project)
    5. 5. Challenges  Addressing local political/financial risks by providingAddressing local political/financial risks by providing non-Grant Financing with: concessional/ contingentnon-Grant Financing with: concessional/ contingent finance, loans, and guaranteesfinance, loans, and guarantees  Strengthening national financial capacity to beStrengthening national financial capacity to be available for local private sector and localavailable for local private sector and local governmentsgovernments
    6. 6. What next?  GEF could promote further consultationGEF could promote further consultation process with private sector to identifyprocess with private sector to identify alternative financing mechanismsalternative financing mechanisms
    7. 7. What next?  GEF could promote further consultationGEF could promote further consultation process with private sector to identifyprocess with private sector to identify alternative financing mechanismsalternative financing mechanisms

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