PANAMA: Supporting the Panama PPP Unit in project preparation and governance

To maintain the current pace of major infrastructure development and economic growth, the government of Panama has revisited its practices and financial alternatives for infrastructure delivery. In doing so, PSP was prioritized as an essential method for fostering sustainable growth, ultimately leading to the development of a new PPP law aimed at improving the management of PSP in the execution of service infrastructure. PPIAF is supporting the government to enhance the new PPP law and the capacity of its implementing agency through technical assistance that provides strategic and operational advice on planning and project management as well as supporting the various stakeholders involved.
The government considers climate hazards as a principal challenge in its ability to deliver quality infrastructure and attract private sector participation, given the growing climate risks that could be encountered during the duration of PPP contracts. Having just updated its nationally determined contributions (NDCs), the government is also keen to account for all qualifying activities that enable it to meet its climate commitments to the Paris Agreement. As such, CREST top-up funding was used to develop a methodology for linking Panama’s NDCs to low-carbon, climate-resilient infrastructure financing and development. The CREST activity improved enabling conditions to access climate finance and to act as a broker to connect client countries with diverse sources of infrastructure finance. 
By enhancing the clarity of how funding proposals meet investment criteria of different climate financing sources, criteria will be useful in incentivizing PSP in PPP projects that contribute to Panama’s NDCs and that are resilient to climate impacts. Based on client feedback, these recommendations are expected to be included in the PPP agency’s official guidelines and procedures and reflected in an update to the PPP law.