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PPP Cycle

A growing number of developing country governments are interested in using public-private partnerships (PPPs) to provide public infrastructure assets and services. The PPP Cycle section of the PPP Knowledge Lab is set up to help them achieve their goal. Specifically, it aims to help government officials and other interested parties to answer the following questions:

  • What are PPPs, and why would governments want to use them? 
  • What kind of policy, legal, and institutional framework need to be in place to ensure PPPs achieve their objectives efficiently and effectively?
  • What is the process for designing and tendering a PPP project?
  • How can a government manage the implementation of a PPP post bid? 

A substantial body of knowledge on PPPs has been collected by practitioners in the public and private sectors, international institutions, and academic institutions. The PPP Cycle helps readers navigate this body of knowledge step by step, by introducing key topics on PPPs and directing readers to key references and additional information to learn more. 

The information contained in the PPP Cycle primarily draws upon the PPP Reference Guide Version 2.0. jointly developed by the Asian Development Bank (ADB), and the Inter-American Development Bank (IDB), and The World Bank Group, and funded by a grant from the Public-Private Infrastructure Advisory Facility (PPIAF). 

Cycle Stages

  1. Basics

    This section of the PPP cycle, walks though the fundamentals of PPPs:

    • how are they defined
    • what the the major challenges currently facing infrastructure growth and delivery
    • when and how should they be used and what benefits they bring
    • the basic components of typical PPP arrangements

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  2. Framework

    This section of the PPP cycle walks through the characteristics of a robust PPP framework. A PPP framework includes the policy, procedures, institutions, and rules that together define how PPPs will be identified, assessed, selected, budgeted for, procured, monitored, and accounted for.

    Although PPPs can be implemented on a one-off basis, without any specific supporting policy framework, most countries with a successful PPP program have built it on a sound framework. Establishing a clear framework communicates the government’s commitment and helps ensure good governance by promoting efficiency, accountability, transparency, fairness, and participation. These benefits in turn can help generate private sector interest and public acceptance of PPPs. 

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  3. Design & Bid

    This section of the PPP cycle walks through the stages of designing a project and taking it to market, including:

    • understanding and allocating risks
    • engaging with key stakholders
    • understanding and managing environmental and social risks
    • designing the PPP contract, including the performance and payment mechanisms
    • sheparding the project through the tender, including marketing to investors, pre-qualifying bidders, issuing the request for proposals and evaluation
    • reaching financial closure with the private party

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  4. Implementation

    This section of the PPP cycle present three critical areas of project implementation:

    • managing the PPP contract
    • refinancing 
    • handling termination, expiry and handover

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