Steps To Select Most Suitable PPP Option(s) For Infrastructure Financing in African Region To Achieve Climate Resilient Goals

Selecting an appropriate Public-Private Partnership (PPP) option for infrastructure financing in the African region to achieve climate-resilient goals involves several steps and considerations. First, the following local factors should be considered during the selection process:

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Generally, the following factors will impact your climate-resilient PPP projects in the African region as they relate to meeting the Sustainable Development Goals (SDGs):

1. Understand the Local Context: The regulatory framework, economic environment, and stakeholder impact. In Africa, the success of PPPs heavily depends on stakeholder engagement. Identify key stakeholders such as government bodies, private investors, NGOs, local leaders, and community influencers who will impact the PPP project.

2. Assess Climate Resilience Objectives: Define specific, achievable climate resilience goals with appropriate timeframes. Conduct a needs assessment based on local infrastructure deficits and identify the infrastructure sectors most vulnerable to climate change, such as transportation, energy, water supply, housing, etc.

3. Identify Potential PPP Models: There are various PPP models, including Build-Operate-Transfer (BOT), Design-Build-Finance-Operate (DBFO), and concessions. Evaluate the practical implementation challenges specific to the African region, and choose the model that aligns best with your climate goals.

4. Risk Management: PPPs often involve the sharing of risks between the public and private sectors. Assess how these risks are distributed in each model, particularly focusing on environmental and financial risks associated with climate change.

5. Evaluate Financial Viability: Public-private partnership (PPP) projects require a commitment of long-term funds. It is essential to determine and assess the available sources of investment by exploring both Western and African funding models. Also, conduct a cost-benefit analysis (CBA) to identify the most suitable financing model. The private sector considers the return on investment (ROI) before committing funds to any project, so it’s crucial to determine the expected financial returns and how they relate to climate resilience outcomes.

6. Engage in Stakeholder Consultation: Many PPP projects have failed because local factors were not considered during the conception and planning phases. It is important to consult with local community leaders, industry watchers, deal makers/breakers and financial institutions to ensure their needs and perspectives are incorporated into the PPP framework. Non-governmental organizations (NGOs) are increasingly important in infrastructure projects as watchdogs. Engaging with NGOs focused on climate change and sustainability can provide valuable insights and help build credibility.

7. Implement Sustainability Criteria: PPPs are typically used to finance long-term projects, making it essential to incorporate sustainability criteria to meet long-term objectives. Therefore, it is important to integrate environmental factors and sustainability criteria into project assessments. Additionally, establishing an effective monitoring and evaluation framework will measure the project’s impact on climate resilience over time, helping to achieve sustainability goals. This should include a system for ongoing monitoring, assessment, and reporting to evaluate climate resilience outcomes against the initial mandate. Moreover, processes should be created to adapt and improve infrastructure projects based on new climate data or unforeseen challenges in Africa.

8. Capacity Building and Knowledge Sharing: While PPPs may feel like a new concept in Africa, the principles embedded in PPPs have been used historically in community development across various African countries with outstanding successes. It is vital to develop training programs that combine modern PPP methodologies with traditional African community development models to ensure success. For instance, I participated in the French Development Agency-sponsored PPP program in Ethiopia in 2020 which adopted a pedagogical approach with local engagement. Also, the Kigali PPP Water Project is celebrated as a model in the EMEA region. Such programs should be shared among African countries to enhance infrastructure delivery.

9. Legal and Contractual Considerations: Ensure PPP projects comply with local legal frameworks while maintaining adaptability in the contractual agreements to account for evolving climate change impacts and project implementation challenges in Africa.

10. Pilot Projects and Pipelines: PPP projects involve significant financial commitments, and errors can prove costly. Project sponsors or funders in an attempt to avoid costly errors or mistakes, often delay infrastructure delivery across Africa. Therefore, it is advisable to initiate small-scale pilot projects to test ideas and partnerships before proceeding to full-scale implementation. Insights gained from pilot projects can refine approaches and strengthen partnerships, and they can also be used to build a pipeline of future projects. This approach as recommended by Dr Akhator will enhance infrastructure delivery in Africa.

I am persuaded, based on my experience thus far - that with structured steps and prioritising these ten (10) factors, you can select the most appropriate PPP option for infrastructure financing that effectively enhances climate resilience in the African region.