To make ends meet, many governments are
turning to public-private partnerships (PPPs). PPPs
allow the public sector to leverage private funding
and expertise to more rapidly plan, launch and
deliver infrastructure projects. In exchange, private-sector partners are given long-term maintenance
and operation contracts that turn a pro;t.
“On the face of it, PPPs are a great project model
to ;ll in the funding gaps these countries face,”
says Andy North, a former senior vice president of
strategic development and management in Kuala
Lumpur, Malaysia, for AECOM, a global design,
engineering and construction ;rm.
;e global gaps are staggering. According to
McKinsey & Co., an estimated US$57 trillion will be
needed to ;nance infrastructure development around
the world through 2030, with much of that invest-
ment needed in developing countries. Latin America
and the Caribbean, for example, will need more than
US$700 billion to double power-generation capac-
ity by 2030, according to the U.S. Energy Informa-
tion Administration. And sub-Saharan Africa needs
US$93 billion per year to address its infrastructure
shortfall, according to ;e World Bank.
Given these urgent needs, PPP projects hold
huge potential. But governments must clarify proj-
ect roles, risks and ROI before private organizations
will be prepared to foot the bill.
nfrastructure projects help nations
build a better future. Emerging
economies need upgrades to roads,
railways, energy grids and broadband
networks in order to sustain
domestic growth. But these countries
face a particular conundrum: how
to build highways, power plants and
ports that will stimulate economic
development when public funds are
in short supply.