MCDF PPP Hot Topics Workshop Series Concludes by Examining New Sources of Public PPP Financing

Experiences and lessons learned on mobilizing new public financing sources for public-private partnership (PPP) infrastructure projects, as debt levels and private infrastructure financing demand rise, were the focus of the fourth and final virtual workshop in the Multilateral Cooperation Center for Development Finance (MCDF) PPP “hot topics” series on 5 September.

Co-organized with the Egyptian Ministry of Finance, African Development Bank, Asian Development Bank (ADB), Public-Private Infrastructure Advisory Facility, World Bank, and World Association of PPP Units and Professionals, the workshop looked at mechanisms and approaches for increasing public PPP funding needed to better leverage private financing.

PPP practitioners, financiers, and other stakeholders noted the difficult fiscal and debt situations of many developing countries which is reducing the availability of funding from central governments. They looked at a range of approaches for tapping non-traditional sources of public funding and related experiences, covering climate finance, carbon markets, municipal bonds, sub-national financing, land value capture, and guarantees.

Experts from the Public-Private Infrastructure Advisory Facility and World Bank provided insights on their Creditworthiness Academy program over the last few years, and described findings from the recent publication Innovative Funding and Financing for Infrastructure. A key example was the use of land-value capture to build municipal infrastructure in Medellin, Colombia, where land value has increased thanks to new infrastructure services provided by PPPs.

A panel of practitioners from ADB and the Ghana Infrastructure Fund went on to discuss the carbon market’s current landscape and outlook, as well as how it could be used to supplement funding for PPPs. They also highlighted experiences such as Ghana's use of royalties at the sub-national level to expand public funding for infrastructure PPPs that benefit areas where mineral extraction takes place.

“Combining infrastructure projects with private sector-driven solutions to increase climate resilience and generate carbon credits is a clear win-win for business and sustainable development,” said Ede Ijjasz, MCDF Senior Advisor to the CEO and a moderator of the workshop. “The trick is to ensure conditions are in place to deliver new public financing sources so that PPP projects can get off the ground,” he concluded.