Overview: Public-Private Partnerships
Public–private partnerships (PPPs) can play an important role in addressing the huge infrastructure investment shortfall in Asia and the Pacific. ADB encourages project financing in cooperation with the private sector in all its core operations.
Infrastructure needs in developing Asia and the Pacific will exceed $22.6 trillion through 2030. Available funding from traditional sources falls far short of the investment need. With countries in the region facing a huge shortfall in investment, along with its negative consequences on economic growth, measures are urgently needed to meet the additional funding requirements. PPPs can play an important role in addressing this massive requirement.
Benefits of partnering with the private sector
The private sector is often considered to provide greater efficiency than the public sector when managing infrastructure projects and delivering infrastructure services. By investing in new technologies, bringing innovative solutions, and encouraging more transparent organizational structures, the private sector has the potential to improve operational efficiency as well as asset and service quality.
ADB support for PPPs
To support PPPs in the region, ADB has a dedicated team of advisors with vast infrastructure finance experience to assist both public sector clients and private sector sponsors across a wide range of sectors.
ADB provides an integrated and holistic approach to PPPs:
- support for PPP frameworks and institutions,
- transaction advisory services, and
- financing of projects (public and private).
ADB’s PPP Operational Plan provides a comprehensive framework for scaling up PPPs in the region.
ADB bases its PPP operations on four pillars:
- Advocacy and capacity development—ADB plays a leadership role in advocating for PPPs within developing member countries (DMCs).
- Enabling environment—ADB assists DMCs in developing policy, legal, regulatory, and institutional frameworks to facilitate, guide, and manage the development of PPPs.
- Project development—ADB assists in the development of pathfinder or first-of-its-kind projects, provides support throughout the project planning, investment decision preparation, and structuring processes, and provides transaction advisory services to DMC clients.
- Project financing—ADB’s nonsovereign products and commercial cofinancing enable it to leverage assistance and catalyze change through greater private investment in the DMCs. ADB also offers sovereign products to support PPP financing.