las Jett, public-private partnership specialist, PPP
o;ce, Asian Development Bank, Manila, the Philippines. He notes that Pakistan recently closed
several wind power PPP project deals, thanks to
proper risk allocation.
“One of the key reasons these projects were
attractive to the private sector is that the government addressed many of the risks in their project
agreements,” Mr. Jett says. Planning documents
factored in how currency ;uctuations would impact
budgeting, how much power must be reliably delivered to the grid and who will buy the power at
what rate to solidify the project’s long-term value
“In a lot of cases, the private investors cannot
see how they will get the full cost recovery,” Mr.
PAVING THE WAY
To attract private-sector investments, governments
must paint a clear picture of what they bring to
the table. But this will be easier for some projects
than others. While energy and toll road initiatives
may o;er a distinct ROI, projects to generate clean
drinking water or treat wastewater have less obvious revenue streams once construction is complete.
Indeed, power projects are among the most
common types of PPPs, says Alexander Nicho-
Amount sub-Saharan Africa needs to
address its infrastructure shortfall
Source: The World Bank
Amount that will be needed to finance
infrastructure development around the
world through 2030, with much of that
investment needed in developing countries
Source: McKinsey & Co.
Amount Latin America and the
Caribbean will need to double power-
generation capacity by 2030
Source: U. S. Energy Information Administration