When the Public-Private Infrastructure Advisory Facility (PPIAF) was established in 1999, developing countries were only starting to bring in private investments in infrastructure (PPI) and only in a handful of countries. In recent years, finance for projects with private participation has totaled around $100 billion each year, nearly three times as much as in the past. PPI projects have also successfully closed in nearly 120 World Bank borrower countries to date.
This is no coincidence. When its founders—the World Bank Group and donor partners—established PPIAF, they had this mission in mind: assist governments in developing countries tap the full potential of private sector involvement in infrastructure. PPIAF provided early support developing the PPP laws and institutions in countries that are most active in the market today—Brazil, Indonesia, Nigeria, South Africa, and Turkey, to name a few.
PPIAF’s recipe for enabling private finance is simple. While many initiatives focus on structuring and financing infrastructure projects with private participation, PPIAF sets the stage to make this possible. For 20 years, PPIAF has supported a better investment climate by advising governments on how to establish the rules of the game and the system of governance for PPPs and other forms of private financing; and, by funding capacity building, knowledge, and data platforms on this topic.
Today, PPIAF is in places like Afghanistan, Burkina Faso, Ukraine, and the West Bank and Gaza, but the same recipe applies: help lay the foundations for future infrastructure sustainability—what we call the critical upstream. PPIAF is also in mature markets—this time helping governments tackle the second-generation challenges of scaling up private financing, such as the management of fiscal commitments and contingent liabilities; supporting the development of local currency financing mechanisms in support of PPI; and even helping governments direct PPI investments towards a specific agenda, such as renewable energy, climate resilience, and rural projects.
These are some of PPIAF’s results in the last 20 years:
- $17.4 billion leveraged for infrastructure projects
- 146 policies, laws, and regulations facilitated to improve enabling environments
- 284 institutions strengthened
- More than 19,000 officials trained to better manage infrastructure development projects
- $973 million for infrastructure projects raised by sub-national entities with PPIAF support
It takes significant effort to close a first PPP. In 2018 two landmark PPPs financially closed: the Tibar Bay Port PPP—a first for Timor-Leste, one of the youngest countries in the world, and the Kigali Bulk Water project in Rwanda, considered the first water build-operate-transfer project in Sub-Saharan Africa. Before Tibar Bay Port or Kigali Bulk Water were even identified as projects, grants from PPIAF were already deployed, almost as a foundational ‘de-risking’ initiative.
Jemima T. Sy, PPIAF Program Manager explains, “We first advised governments on their options for financing infrastructure and catalyzed informed debate. Then, PPIAF strengthened the granting authorities to ensure they had the capacity to manage the process well and that the projects could not only attract private capital but also deliver socially beneficial services.”
She added, “A long-standing facility such as PPIAF is important because building institutions and strengthening capacity requires time and incremental support.”
Similarly, PPIAF is helping to strengthen the PPP institutions in Kenya. After helping Kenya enact a PPP law in 2013, PPIAF also worked to set up a functional PPP unit to champion the government’s infrastructure development agenda. Meanwhile, PPIAF’s Sub-National TA program supported a number of sub-national agencies on their financial management capacity, access to market-based financing, and enhancing their own revenues.
For all these reasons, PPIAF is unique among global partnerships. What’s in store for our next 20 years? Through the on-going support of our donors, we will continue to lay the groundwork for investments in climate resilient and inclusive infrastructure development that promotes economic activity, connects goods and people, and delivers services that improve the quality of day-to-day living in developing countries. All critical components for helping us reach the Sustainable Development Goals.