PPIAF developed a rapid needs assessment tool to help governments identify, screen and prioritize PPP projects, ensure that projects tie into national and regional priorities, and diagnosis changes needed to improve legal, regulatory, and institutional frameworks.
For years, lack of sufficient infrastructure services has been a huge problem in many African countries. Leaders have acknowledged the enormous role the private sector can play in improving infrastructure development and are giving more priority to the public-private partnership (PPP) agenda. Despite the new shift, there is still a very slow implementation of PPPs due to risks and challenges: lack of capacity, institutional constraints, inadequate legal and regulatory frameworks, project risks, and difficulties in mobilizing finance.. One key way of improving the prospects of PPPs, for example, is to ensure that PPP projects can be identified and prepared properly and that they tie in well with national and regional priorities. This is a key aspect of PPIAF’s Theory of Change.
PPIAF Rapid Needs Assessment Tool Facilitates PPP Diagnostics for Government Officials
To tackle these challenges, PPIAF developed a rapid needs assessment tool to assist senior level government officials in mapping out options and developing terms of references for more detailed follow-up work. The tool facilitates:
• Identification of projects,
• Collection of data on projects
• Evaluation of projects based on selected criteria,
• Identification of two or three priority projects
• Development of an action plan to bring the projects to the market.
The goal of this exercise is to help governments identify a short list of priority projects consistent with government plans, and consider value for money, private sector involvement, and risk sharing, etc. Another important component involves diagnosis of the existing framework and identification of potential improvements to the policy, institutional and legal frameworks that would help jump-start the PPP program and make it successful.
Identification of Viable PPP Pilots Yield Positive Results
Since 2008, PPIAF has supported 13 African countries in identifying pilot PPP projects through this tool. The objective of this support has been to assist the countries prioritize the projects that are likely to be structured with private sector participation. In line with the PPIAF strategy and Theory of Change, these activities help create bankable projects, but also increase transparency and accountability and strengthen political, legal and regulatory frameworks.
To date, PPIAF has provided support to Uganda (2008); Liberia (2009); the Rwanda power sector (2011), Zimbabwe (2012); Côte d’Ivoire (2012); Gambia (2013); the Ghana power sector (2013); Malawi, Tanzania, The Gambia, Niger (2013), Democratic Republic of Congo (2013), and Guinea (2014).
PPIAF expects to get more requests from other African countries to help them identify priority projects and to review the legal framework. As a result of this support, some select projects have been implemented or are about to be implemented. Guinea has identified two priority projects: A PPP project for the electricity company EDG-Electricite de Guinea and second one for rehabilitating the first 40 km of the Conakry-kankan railway line.
The Government of Gambia has also accepted one of the main recommendations of the study and created a PPP unit under the Ministry of Finance and Economic Affairs. The Government has requested further assistance to support with capacity building for the newly created PPP unit. PPIAF is planning to provide the follow up support in partnership with the IFC and African Development Bank.
Priority Projects Require Strong Political Commitment and Regulatory Frameworks
A key finding of this exercise has been that top priority projects identified may not always be in the government’s top priority list, but they could be projects that can be implemented in a relatively short or medium term and can produce high impact.
However, to bring these projects in to the market, a strong political commitment and a clear regulatory framework are essential. And, it is often tempting for governments to include non-viable projects for political reasons, but the small size of the market in these countries makes them vulnerable when they try to push undesirable projects through for political reasons. For this reason, the recommendations of these reports need to be brutally honest when assessing the pipeline and recommend additional support to governments to strengthen the PPP transactions initiatives.