1. What role for Public-
Private Partnerships?
Delivering on the Post-2015 Development
Agenda
Lessons from an IEG Evaluation
December 12, 2014
Stefan Apfalter
Senior Evaluation Officer, IEG

2. How can PPPs help close the
$ 1 trillion infrastructure gap?
• Leveraging scares public resources
• Potential to increase efficiency
• USD 79bn p.a. PPP volume globally
• But PPPs are not the panacea
• PPPs require their own infrastructure!
Title of Presentation 2

3. PPPs respond to market failure
while minimizing government failure
Services contracts Privatization
“Pure public“ “Pure private“
Licensing and regulation
Construction contracts
New Assets Existing Assets
Performance-based
maintenance
Operations and
Maintenance (O&M)
Design, Build,
Finance, Maintain
Build, Transfer,
Operate
Build, Own,
Operate, Transfer
Lease
Concession
Key: Core PPP types Other type of private sector involvement

4. Applying a strategic country
approach
 Advise governments on “if and how” to use PPPs
 Based on comprehensive diagnostics
 Readiness of sector
 Public sector capacity
 Fiscal implications
 Integrated in NIPs
4

5. Addressing political economy
 Sector reform is foundation of success,
but often fails
 Broad-based and early stakeholder
consultations
 Government
commitment required
 Local capacity
5

6. Investing more at the frontier
6
% = PPP market in these countries

7. Learning through better M&E
7
NO Data
Data

8. Going forward
• Applying strategic country
approach
• Addressing political
economy factors
• Investing at the
frontier
• Learning through better M&E
8

9. 9 Thank you!

10. Comparison of Public Sector
Payment Profiles
Upfront
VGP
Costs /
Expenditures
Traditional Government Procurement
Capital
Costs
• Capital and operating
costs are paid for by the
public sector who also
takes the risk of cost
overruns and late
delivery
Running Costs
Overruns
Estimated Running
Costs
Costs
Overruns
5 10 15 20 Years
Construction Operation and
Maintenance Phase
Costs /
Expenditures
PPP Procurement
Preparation
• Public sector pays over the long
term as services are delivered
• Has to cover increased
preparation costs and, at times,
part of capital costs to make PPP
project bankable.
• Takes on contingent liabilities
Contingent Liabilities
Payment based on
Usage
Payment based on
Availability
5 10 15 20 Years
Construction Operation and
Maintenance Phase