Presentation to the UN Economic Commission for Europe
Committee on Innovation, Competitiveness and PPPs, Geneva, March 21th, 2017
Thibaut Mourgues, Founding Member of 4IP, was invited by the United Nations Commission for Europe (UNECE) Committee on Innovation and Competitiveness to deliver a presentation on PPPs and SDGs during the 11th meeting of the Committee held on March 21th, 2017 at the Palais des Nations, Geneva. Drawing on the presenter’s experience as PPP unit adviser and PPP practicioner, the talk focused on how PPPs should be better tailored to strengthen their relevance with regards to SDGs.
After a short introduction stressing the importance of PPPs as well as the criticism they often have been subjected to, two case studies were highlighted. The first illustrated how the Noor solar power plants in Morocco used innovative financing schemes to generate and sell power at an affordable price for the national utilities while offering an attractive return to the private sponsor. The project demonstrates the competitiveness of renewable energy and will deliver a strong and long lasting impact at the economic, social and environmental levels. The second highlighted project, the Dakar toll road, which was commissioned for the first tranche in 2013 and the second tranche in October 2016, has been designed to be affordable to the users thanks to a significant viability gap financed by the public authorities. The PPP part of the project was accompanied by a major social investment financed by donors which involved the resettlement of 50 000 inhabitants with all the necessary facilities, the urban restructuring of an area of 250 000 persons prone to flooding including water sanitation, and the improvement of social conditions.
Based on these examples, the talk discussed possible strategies to improve PPPs. Better programming would be the first stage, including beside governance issues the development of adequate prioritization methodologies which are rarely formalized at Government level. As an example, the AfDB additionality and development outcome assessment (ADOA) could be a powerful source of inspiration if adapted to the specificities of each public authority. The second stage involves better PPPs structuring. This area can be addressed in different ways, from lowering financing cost through innovative schemes, to improvement in the governance framework such as a systematic evaluation taking into account environmental and social factors, and extending to a deeper analysis of debt and fiscal sustainability issues. The third stage, PPP implementation, should not be overlooked if projects are to deliver up to expectations. Lastly the talk mentioned the obstacles to be overcome and proposed a few selected policy recommendations (capacity building, strengthening PPP units’ role, evolving with the PPP program maturity, promoting the role of impact investors and designing impact investment facilities with both donors and impact investors).
The presentation was followed by a lively debate which emphasized the need to improve measurement and scoring of project impact as well as the necessity to amplify the efforts of academia, public organizations, IFIs, Governments and investors to converge toward better structured and implemented PPPs.