The first step in establishing a PPP framework is for government to articulate its PPP policy.

A PPP policy includes:

  1. PPP program objectives
  2. PPP program scope
  3. Implementing principles

Many governments issue a PPP policy statement or document to communicate to the public and to potential investors the government’s intention to use a PPP, and how PPPs will be implemented. Other countries incorporate these elements of PPP policy within PPP laws and regulations, or guidance material. PPP policies benefit from being nested within a more comprehensive public investment or infrastructure policy framework.

1. Program objectives

Governments pursue PPP programs for different reasons. Some countries begin using PPPs in a particular sector, simply as a way to meet investment needs given fiscal constraints. For example, PPPs were first used in South Africa in the roads sector, with the specific objective of building more highways. In the Philippines, many of the first PPPs were in the power sector, where the state-owned power company contracted with independent power producers to solve a power crisis. In both cases, the use of PPPs subsequently extended into other sectors.

Many governments define broader PPP program objectives when formulating and documenting PPP policies. The choice and relative priority of these objectives depends on the government’s other policies and priorities. These can include:

  • enabling more investment in infrastructure by accessing private finance;
  • achieving value for money in the provision of infrastructure and public services;
  • improving accountability in the provision of infrastructure and public services;
  • harnessing private sector innovation and efficiency; and
  • stimulating growth and development in the country. 

2. PPP program scope

Many governments limit the scope of their PPP program to particular types of projects or contracts. The aim should be to focus on those projects that are most likely to successfully achieve the government’s objectives and provide value for money as PPPs. Governments define the PPP program scope by a combination of the following:

  • PPP contract types: some countries define the types of contracts that are included under the PPP policy.  
  • Sectors: the PPP program may be limited to the sectors most in need of investment or improvements in service performance, or those in which PPPs are expected to be most successful. Some countries exclude sectors considered too politically sensitive.
  • Project size: many governments define a minimum size for PPP projects implemented under the PPP framework. Smaller projects are excluded because of the relatively high transaction costs of implementing a PPP. In some cases, smaller projects are implemented, but are not subject to the appraisal and approval requirements defined in the PPP framework.

3. Implementing principles

PPP policies often set out implementing principles—the guiding rules, or code of conduct under which PPP projects will be implemented. These principles set out the standards against which those responsible for implementing PPPs should be held accountable. Principles are often supported by regulations and processes, detailing how the principles will be put into practice.

Learn More

    • 2014
    • Asian Development Bank (ADB), World Bank Group (WBG), Inter-American Development Bank (IDB), PPIAF

    PPP Policy

    PPP Referemce Guide Version 2.0

    The PPP Reference Guide presents a global overview of the diversity of approaches and experiences in the implementation of PPPs, providing an entry point to the substantial body of knowledge on PPPs that has been built up by practitioners in governments, the private sector, international institutions, and academics. It seeks to provide advice on what PPP practitioners should know, rather than provide advice on what to do. This section talks about PPP policy. 

    • 2015
    • Government of Australia

    Policy Framework, Australia

    National Public-Private Partnership Guidelines

    This National PPP Policy provides a consistent framework that enables public and private sectors to work together to improve public service delivery through private sector provision of public infrastructure and related services.The objectives of the National PPP Policy Framework are to: encourage private sector investment in public infrastructure and related services where value for money for government can be clearly demonstrated; encourage innovation in the provision of infrastructure and related service delivery; ensure rigorous governance over the selection of projects for PPPs and the  competition for and awarding of contracts; provide a framework and streamlined procedures for applying PPPs across Australia; and clearly articulate...

    • 2004
    • Government of Brazil

    Lei No 11.079, de 30 de dezembro de 2004 (Brazil)

    Federal Public Private Partnership Law

    This law institutes general norms for the procurement and contracting for public-private partnerships for states, municipalities and the federal government.  Esta Lei institui normas gerais para licitação e contratação de parceria público-privada no âmbito dos Poderes da União, dos Estados, do Distrito Federal e dos Municípios

    • 2012
    • Government of Colombia

    Ley 1508 de 2012 (Colombia)

    Por la cua11Se establece el régimen jurídico de las Asociaciones Público Privadas, s •• dictan normas orgánicas de presupuesto y se dictan otras disposiciones.

    • 2014
    • Asian Development Bank (ADB), World Bank Group (WBG), Inter-American Development Bank (IDB), PPIAF


    Asociationes Publico-Privadas: Guia de Referencia Version 2.0

For legal and regulatory resources go to PPPIRC

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