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UNECE Team of Specialists
for PPPs
Introduction to the PPP Model
Presented by:Art Smith
Chairman, UNECE [email protected]
October 9, 2012
Infrastructure F inancing Gap = The gap between Funding Requirements for Investments in Infrastructure (New + Operat ions & Maintenance) and actua l in frastructure expendi tures
The Infrastructure F inancing Gap is huge in develop ing countr ies amount ing to more than US$900 b i l l ion/year
Across the develop ing wor ld , th is amounts to 60% of the tota l in frastructure fi nancing requirement .
T H E W O R L D B A N K
Financing the Infrastructure Gap –
an Imperative for GDP Growth
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Private Investment in Infrastructure, 1990-2010
$US Billions*
Source: World Bank and PPIAF, PPI Project Database
*Adjusted by U.S. CPI
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Private Investment in Infrastructure, 1990-2010, by Region
$US Billions*
Source: World Bank and PPIAF, PPI Project Database
*Adjusted by U.S. CPI
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Definition of Public-Private Partnership (PPP)
• A Public-Private Partnership is a contractual agreement between a public agency (federal, state or local) and a private sector entity. Through this agreement, the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public.
• In addition to the sharing of resources, each party shares in the potential risks and rewards in the delivery of the service and/or facility.
Source: www. ncppp.org
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Completed PPP Projects (U.S.)
Union Station, Washington, DC
Dulles Greenway, VirginiaLas Vegas Monorail, Nevada
JFK International Terminal 4, New York
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James F. Oyster School, Washington, DC
Tolt Water Plant, Seattle, WAFredericksburg, VA Parking Lot
New York Avenue Metro Washington, DC
Completed PPP Projects (U.S.) cont.
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Potential Economic Objectives of PPPs may include:
Reduce development riskObtain project financingReduce public capital investmentAccelerate service availabilityOptimize value for money
−Access to management expertise−Access to technology
Optimize risk allocationMobilize excess or underutilized assetsFoster local capital marketsIndirect economic benefits
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Potential Social Objectives of PPPs may include:
• Achieve legitimate political goals• Improve service to the community, e.g., increased access
to drinking water which meets WHO standards• Extend services to remote or marginalized regions or
populations• Reduce income inequality• Provide environmental enhancement
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PPP Challenges in the Former Soviet Union
• Legal and Regulatory Frameworks• Property Rights• Public and Private Sector Capacity• Political Commitment• Transparency
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