Small and Micro PPPs in Africa - eastafricanchamber.org · Mariana ABRANTES de Sousa Validation Workshop 09 and 10 August 2012 Mombasa Beach Hotel Mombasa, Kenya . bkp DEVELOPMENT

bkp DEVELOPMENT RESEARCH & CONSULTING

REINFORCING THE CAPACITIES

OF EAST AFRICA TO IDENTIFY,

DEVELOP AND

PROMOTE PPPs FOR

INFRASTRUCTURE

Small and Micro PPPs in Africa: Mariana ABRANTES de Sousa

Validation Workshop

09 and 10 August 2012

Mombasa Beach Hotel

Mombasa, Kenya


Public infrastructure investment gap in Africa

Can telecom success be replicated

The economics of public investment and PPP projects

Forms of PPP and the Project Cycle

Project phases

Project risks

PPP examples – sectors

Sources of project funding

Project starting points

Project roles

Project pipelines

Project identification exercise

2

Agenda


Public investment needs in Africa over the

next 10 years: USD 50 bn, excl. telecom

Services of General Economic Interest Recent past: Large scale telecom absorbed 74% of the investment in the

82 PPP projects the five EAC countries 1990-2011, (according to PPIAF)

Future: smaller and micro scale, replicable

Transportation

Water and sanitation (municipal and rural)

Energy production and distribution

Irrigation and water resource management

Agri-business value chain integration and food security

Social Services

Education

Health

3


4

International Banks Crédit €25 miln

6 anos, Euribor+1,5%

ONDD ECA Belgium

Siemens Bélgica Supplier

Vodafone Shareholder 40%

African Trade Insurance Agency

TELKOM Kenya

Shareholder 60% Safaricom Ltd

Kenya 2004

Clients

FRN KES 4 biln (€30 miln)

5 year, BT91dias+1%

State

License

Citibank Nairobi e

New York

Guarantee

75%

Guarantee

70%

Coverage

50%

Coverage

75% commercial risk

97,5% political risk

Funding

Capital €20 miln


Telecom in Africa: Can success be

replicated in other sectors?

Large but modular scale

Imported innovative technology with ECA funding

International management skills

International regulatory standards

Economies of scale and falling prices boosted

user airtime volume and affordability

Low collection risks and costs with pre-paid

services (pioneered by TMN in Portugal in 1995)

Closed network, cancellation of (non-essential)

services acceptable

5


Public services operators are

different…

• Natural monopolies, scale and network effects

• Essential public services cannot close down (nor go out of business)

• Asymmetric risk sharing, creditors and suppliers not usually exposed to risk of loss, State must always pay

• No one is indifferent to public services – Numerous, vocal Skakeholders

– Key subject for party politics, protests

=> Need to compensate for the absence of market discipline

6


Sofia

2005

7

Public vs. Collective Goods & Services

Public

Constitutional definition

Economic definition, public interest

Collective, indivisible

Social and economic infrastructure

Externality

Equitable access, first necessity

Cost of context for economy

Economies of scale, natural monopolies

Political definition

Government responsibility

Citizen demands, public opinion

Impact on election, legitimacy

Private

Divisable

Individual demand, consumption

Market supply, demand

Allocation and access by price

Private responsibility

Private supply except in centralized economy, high inflation, rationing

May have economies of scale, scope


8

Economic determinants in public services provision

Traffic and demand forecasts

Service needs of population

User supported

tariff levels

Affordability

Willingness to pay

Technical solution, investment, Capex

Operating options, Opex

Scale, Dimension, Breakeven

Taxpayer supported Operating regimen Financing Sustainability

price

volume


User supported (user fees)

User tariffs or specific taxes

Tolls, affordable and collectable

Pre-contracted

(ex. inflation-indexed) or regulated

Equitable and proportionate to utilization

Differentiated, peak hour, etc

Taxpayer supported

(Government budget) Investment subsidy, including

donor funds, OBA

User subsidy,voucher, coupon (senior discount, etc) OBA

Operating subsidy, shadow tolls distance-based toll (with traffic counting ) OBA

Operating subsidy, availability payment, time-based toll (without traffic counting)

Other random operating subsidies to cover deficit or minimum services

Pricing and paying for public services


-5000

-4000

-3000

-2000

-1000

0

1000

2000

3000

1 5 9 13 17 21 25

NPV RevenuesMaximum versus Affordable

Receita comp

Receita max

NPV of maximum revenue: 10.885

NPV of affordable revenue: 5,442

(Fee reduction of 50% due to user protests)

10.885,82 €

NPV Investment: 8.667

User fee reduction creates shortfall and need

for taxpayer subsidy, for investment

and/or operation

NPV of

Revenues

(net present

value,

discounted

cash flow )

Combining user tariffs with taxpayer subsidies

Revenues


-40 -20 0 20 40 60 80 100 120 140

1

3

5

7

9

11

Receita tarifas Subsidio exploração Subsidio investimento

11 airport

7 water & sanitation

8 passenger transport, bus

1 primary schooling

2 municipal roads

1- 4 hospital

3 urban metro

9 toll road

5 irrigation

10 -11 telecom

2 - 6 sidewalks

9- 6 ports User tariffs Operating subsidy Investment subsidy

Paying for Public Services: operating vs. capital expenses

User tariff affordability vs. Taxpayer subsidy sustainability


PPP families – sources and uses of funds

12

Who pays ? User paid Taxpayer paid Mixed

User/Taxpayer

Services only Opex PPP

(services) concession of existing

infrastructure, operating leases,

affermage

Out-sourcing services

Co-payments, Output Based Aid

Joint ventures Collaborations

Works only Capex PPP

Greenfield PFI , BOT, shadow tolls,

availability payments

Works & Services PPP

Greenfield or expansion PPP,

concession, toll roads, ports, etc

PPP concession PPP concession,

investment and/or operating subsidies


13

Selection

Preparation

Structuring

Financing

Budgeting

Procurement

Contracting

Execution

Construction

Operations

Monitoring

Evaluation

Reversion

Pre-FEASIBILITY

Identify user needs (traffic

study)

Tariff affordability

Technical solution, capex

and opex

Contracting OPTIONS

Market sounding

Sources of financing

Financial

modelling

Scenarios

User revenues

Budget

subsidies

Financing

criteria

Competitive

procurement

Tender

Standardized

contract

Land

expropriation

Rights of way

Cost control

Inputs

Entry into

service

Tariff

collections

Quality control

Outputs

Inspections

Verifications

Audits

Evaluation

OUTCOMES

Policy alignment

Stakeholder

consultation

Consensus

Objectives, targets,

indicators

Due diligence

Risk analysis,

allocation

Arrange

financing

Budget impact

Final approvals Control, cost,

quality

Ttime

Miletstones

Collections

Maintenance

Reporting

Reimbursem-

ent

Impact

Benefits

Sustainability

Continuity

Guarantees

Risk

management

Financial close

Contract

signing

Disbursemen

t

Defects

Stakeholder

relations

Renewal

Renegotiation

PPP Project Cycle - Phases


Concessionnaire SPV Banks

Insurers Contractor Operator

Port Concessions State Grantor (Condedente)

Concession Contract

Capital

Financing contract

Direct Agreement

Insurance Policies

Sales contracts

Shareholders

Construction Operation Contracts

Port Regulator


Privatization Joint ventures Collaborations

Duration

Valu

e / C

om

ple

xit

y

Works Contract Outsourcing 3-5 years

Works Concession

BOT, PFI & FBOT

15-25 years

Services concession Operating Contract Leases, affermage 5-15 years

PPP

(Works & Services)

Hard facilities

Soft facilities

Services

Forms of PPP

Management Contract 5-10 years


1. A multi-year (administrative) very long term contract by which …

2. the public partner (Concedant/Grantor, the State or Municipality or other unit of Public Administration) transfers to…

3. the private partner or concessionaire …

4. the obligation to build and/or operate the public infrastracture and to provide a public service of a given quality to …

5. the public service users or the Grantor/Concedente itself…

6. together with the right to charge or receive fees in remuneration of the services rendered…

7. to be paid by the users or by the Grantor/Concedant (taxpayer) itself, over time…

8. with the private partner assuming responsability for the financing of the infrastructure and services by banks

Public Private Partnerhip / Concession


Comparing: Public Works Concession

Public partner Any Government entity State or Municipality

Scope Construction to physical

specifications

Provision of infrastructure and

public services

Duration 1-5 years 20-30 years

Procurement

methods

All International tender, competitive

dialog

Rights of State,

public partner

Infrastructure delivered on time

and within budget

Provision of services to users, or

the State itself

Project changes Extra works paid directly Unilateral modifications subject

to Rebalancing over 30 year

tenor

Rights of private

partner

Revision of contract price to

reflect inflation

Financial rebalancing

Govt financing On Govt budget, Govt debt Govt investment subsidy,

operating subsidy only over time

Risk sharing, transfer

to private partner

TCC fixed price contract can

transfer some risks to builder

Must transfer construction risk,

and either traffic or availability

risk


Preparation and Tender Project overdimensioned to traffic forecasts Skewed selection criteria Inadequate analysis of risks to State-

grantor, environmental Few bidders, inadequate proposals Unclear tender specifications Slow tender process or suspension Lack of consultation and involvement of

Stakeholders

Structuring and Contracting, due diligence

• Low levels of experience of State project managers and negotiations Excessive flexibility or rigidity Very tight deadlines for decision, especially

on public side Non standardized contacts, unbalanced or

unrealistic risk allocation Frequent changes in Government policies

and sector programs

Construction and execution

Delays on various sides Unilateral modifications and variation

orders with additional costs, incremental CAPEX which threatens cost/benefit of project

Poor risk management Frequent tacit approvals

Operating, maintenance, monitoring USER insatisfaction, protests Low demand, traffic shortfall User fees increases Increase in operating costs, OPEX Frequent financial rebalancings paid

by the State Lack of reporting and low

transparency

Project Cycle - Risks and Threats


Example 1 - Maternal Health Vouchers

Needs: to improve maternal health and reduce mortality

Project concept: OBA subsidized voucher for “outputs”— “safe

delivery” (SD) including 4 prenatal visits, attended delivery and one

post-natal visit, screening for STDs. Pilot 2006

Payment: User co-payment of 3,000 shillings, voucher costing 60,000-

200.000 shillings

Service providers: Accredited local clinics, community distributors

(VCBDs)

Promoter: INGO (MSI-U), Voucher Management Agency, arranging,

selection and training clinics and distributors

Independent Verifier: MSI-U under sub-contract from Ministry of Health

Subsidies: KfW US$4.3 million until Dec-2011, Government budget

commitment of US$ 3 million in 2012

Results: 136,000 people treated until Dec-2011

19


20

Voucher Management Agency Clinic accreditation

Ministry of Health KfW, OBA

Clinics

Clinics Clinics Clinics

Voucher Distributors

Clinics Providers

Verification Claims processing (by SMS)

1.Maternal Health Voucher with OBA subsidy


Example 2- Water and Sanitation

affermage / O&M Contracts

Needs: potable water supply and sanitation

Project concept: operator provides services, with cost

recovery from user tariffs, may receive OBA subsidies for

connections

Contract: Local contracting authority asset owner,

management, operation & maintenance 1-5 years,

renewable, to users association, CBO, NGO or local

entrepreneurs Regulation: Ministry/DG Water provides central

guidelines, generic documentation (tender, contract, monitoring). Regional water authority oversees tariffs

Construction undertaken and financed by asset owner

21


22

Ministry

Local Govt 1

Local Govt 2

Local Govt 3

user

Operator 1

Operator 2

Operator 3

docs Regional Water Dept

user user user user user user

2- Water and Sanitation affermage / O&M


Example 3 - Small scale Aquaculture

Livelihood Service Centers (ALSC) Aceh

Needs: Production hurt by shrimp diseases, low quality, 2004 tsunami

Project concept: ALSC partnerships between farmers’ organizations,

donors, local governments and research institutions, with “enterprise”

value-chain approach, including

Technical support, demonstration ponds

Business training , legal services,

Microfinance

Collective purchase of inputs, aggregation

Collective stock management and post harvest services

Collect marketing and gaining access to international markets

Objective: Smallholder clusters to become commercially competitive

Financing: Humanitarian donations and rehabilitation investments

23


24

3. Small Scale Aquaculture Service Centers Value Chain integration

Service Center

Government

Donors Research

Institute

Producer Association

Market Suppliers

producers


Example 4 – Irrigation, drainage Megech (Lake

Tana) Ethiopia

Needs: 60% of food gains in future will come from better irrigation,

only 4% of Sub-saharan agricultural land is irrigated

Project concept: Construction and management of a new, large-

scale irrigation scheme to serve 6000 smallholder subsistence

farmers, over 4,000 hectare. Service fees set to cover O&M costs,

including energy

The contract: 8-year “enhanced” operation and maintenance,

operator supervises construction (any savings shared with

construction company); operator remunerated per

performance indicators, has no demand risk

Financing: Investment funded by $30 million IDA loan to

Government. O&M contract funded by $8 million IDA loan

25


26

4. Megech (Lake Tana) large scale irrigation project

BRL Ingénierie

Government

O&M++

Construction Contractor Market

producers


Example 5- SSIP small scale infra

provider, Water

Needs: 60% of rural population lacks access to safe water; variety of

contracts

Project concept: Operator to install 400 new water connections in 2

years, households to pay 10% of connection costs

Contract: Standardized 5-year management contract, competitive

tender to Trandint Limited for lowest price of $270,000 in Busembatia

Financing:

Subsidy of $300,000 from ADA, for connection costs (one off)

$100,000 loan from bank

GPOBA provided funding for capital investment costs to support

the private operator

Advisor: IFC, since 2007


28

The need : To raise crop yields of TEF , an African “orphan crop” which is the most widely cultivated cereal in Ethiopia The project concept : Joint research to develop “semi-dwarf” plants that won’t topple over The operator: Various non-profit partners, including University of Berne, Switzerland with Ethiopian researcher, Research institute in Kenya, Ethiopian field research Funding: SFSA Syngenta Foundation for Sustainable Agriculture Tef (Eragrostis tef, from the sorghum/millet family) is an African “orphan” crop, little studied because of limited international trade. The plant is well adapted to the climatic and soil conditions in Ethiopia, and the he seeds contain high levels of protein are free of gluten. Also working with Borlaug Global Rust Initiative on a new wheat rust which first appeared in Uganda, and developing farm insurance in Kenya

Example 6 - International Tef Improvement Research Project


Example 7- Water micro-financing in

periurban aereas

Needs: Potable water

Project concept: small scale water operations,

installing household or yard connections, based on

user tariffs

Contract: to CBOs, 13 sub-projects

Financing, average US$ 83,000

Output based donor subsidies, EU for connections

PPIAF-PDF investment subsidy for major capex capital

expenditure

Local micro finance institutions, local bank

29


Example 8 – Business Development

Services (BDS)

Needs: Coffee Farmers Cooperative needs to improve

quality and yields and create brand

Project concept: To strengthen competitiveness and raise

added value with business development services (BDS),

Fairtrade certification and linkages to markets

Contract: Marketing company to pre-finance farm inputs,

to recover from coffee sales. BDS providers selected

competitively.

Financing: Pilot Value Chain Grant from Matching Grant

Fund (MGF)

30


Example 9: Small scale passenger services,

urban vs. rural

Regional Government Municipality

matatu

Microfinance Insurer

Common carrier licenses, duration, (non) exclusive routes, subsidies

(Int’l) Funds

Exclusivity Subsidy

Rural only chapa dala dala


Example 10– Unsolicited proposals

Private proponent identifies need and presents

project (technical) concept to Public Authority

PA either rejects the techncial concepts or asks

proponent to prepare feasibility study

If technical proposal is accepted, PA issues

request for tenders (including financial proposal)

Original proponent may, or may not, enjoy advantage

ex. right of first refusal, bonus points, etc

If award goes to new bidder, original proponent is

reimbursed for feasibiltiy study as per pre-approved

cost

Contract details disclosed, full transparency

32


Public / Collective goods in agriculture

Tangible

Irrigation, drainage and

flood control systems

Drip irrigation kits

Collective storage

facilities, accredited

Resource

management, water

rights, grazing lands

Forestation

Intangible

Small producers

organization and

aggregation

Supply chain integration,

from purchasing to market

Certification of origin,

quality, organic, Fairtrade,

branding

International market

access 33


34

• The export company Target Agricultures trains 320 farmers in organic production (dried pineapple & papaya) in Sri Lanka and commits itself to accept their produce for export.

• Fair organizer BioFach trains and organizes organic food producers and creates a Centre of Excellence in Brazil.

• DaimlerChrysler supports smallholder production of natural fibers for auto seats, creates a processing cooperative in the Philippines and supports the development of alternative fibre products.

• Fruta del Pacífico trains 600 farmers in ecological banana production and helps to set up a farmers cooperative in Ecuador.

• Deichmann introduces social and environmental standards in Indian supply chain for shoe production. • Seda & Fibras establishes silk production in Paraguay, including the forestation of mulberry trees and

family-based cocoon production, targeting 2000 families. • Kraft Foods introduces a national quality standard for coffee production in Peru, trains advisers and

helps to set up a national certification system. • Cosmetics producer Wala introduces organic rose production in Romania, trains 250-300 farmers, commits

to fix purchasing prices and helps to build up an organic farmers association and a certification system. • Unilever Bestfoods rehabilitates out-dated state-owned tomato processing plant in Ghana,

transfers ownership to farmer families and commits to pre-established prices for tomato products. • A Flower Importers Association introduces a flower label program which establishes and certifies social

and environmental standards in flower production in Zimbabwe and Kenya http://www.fao-ilo.org/fileadmin/user_upload/fao_ilo/pdf/DonorApproachestoPro-PoorValueChains.pdf

Examples of pro-poor value chain projects funded by the PPP facility and implemented by GTZ

http://www.fao-ilo.org/fileadmin/user_upload/fao_ilo/pdf/DonorApproachestoPro-PoorValueChains.pdf






KSF and lessons learned in PPPs

• Effective project risk

sharing essential

• Value for money must

be better than under

public provision

• Long term

partnership,

equitable, flexible

Replication of best practices

Central PPP Unit, responsible for

design, standardization and

coordination with line ministries

responsible for technical

decisions, in order to accelerate

flow of smaller scale deals

Ministry of Finance responsible

for financial due diligence and

budgeting and allocation of

scarce and valuable taxpayer

support, OBA/donor funds,

external debt capacity

35


36

Project Cycle – Key Success Factors Needs -

MDG

Objectives

Partners Project Design

Development

Funding

Donors

Creditors

Execution

Delivery

Evaluation

Target

population

Focus of

Projects

Basic needs

Food security

Local

knowledge

contacts

Goverment

authorities

Capacity

Credibility

Technology

Adequate to

objectives

Practical and

doable

Tariff setting

Funding for

development

impact

Donors,

criteria

Funding

cycles

Co-funding

Eligible

projects

Local capacity

Skills transfer

Control

Monitoring

site visits

Continuity

Results for

beneficiaries

Reporting

Transparency

Improve

nutrition

Generate

income

NGO, CBO,

Association

s, cademia

Entreprene

urs

Roles in

project

User affordability

willingness to pay

Government

budget

commitments

Licenses and

approvals

Calls for

proposals,

tenders

Due

diligence,

site visit

Local

community

development

Continuity

Sustainability

Follow-up

Replication


Dimension appropriate to demand, for good level of utilization

(load factor) consistently above breakeven, modular

expansion if possible

Cost control in investment, maintenance, operations

Satisfaction of (naturally captive) Users/Clients

Optimization and collection of user charges (affordability), aim

for full recovery of operations & maintenance costs

SMART Government/donor subsidies, output-based, budgeted

Minimizing fiscal risks to taxpayers (budget sustainability)

Medium term contracts, evaluations pre-renewal

Engage Stakeholders, build consensus, aggregate

Basic principles as Key Success Factors


Stakeholder Roles and Functions

Users and

beneficiaries

Governments

Public contracting

entity

Regulator

Third Party Payor of

subsidies

Investor/creditor

Sponsor and

promoters

Operators

Contractors

Suppliers

Equity investors

Finance Parties

Creditors

Donors

38


39

Financing: Govt vs Private operator

Sources of

Funding

Public Asset Owner

Operator

Private Operator

Issues

Govt Budget

Commercial management

Financial self sufficiency, or

SMART subsidies based

on volume and quality of

services rendered

Procurement, public tender

Financial self-sufficiency

Govt monitoring

Rigor, professionalism

Policy

priorities

Approval

process

IFI’s

EIB, EBRD, EDFIs

Europeaid

Donors, GPOBA

Eligibility criteria

Projects vs programs

Economic feasibility

Public procurement

Identifiable projects

Public procurement

Financial Feasibility

Guarantees

Efficiency

Cost

recovery

Commercial Banks

Private promoters

investors

Microfinance

Risk allocation

Guarantees

Financial feasibility

Risks vs return

Commercial risks,

regulation

Co-financing

Bankability

Cost

recovery


Sources of funding: Output Based Aid

40

Title GPOBA – Global Partnership on Output-Based Aid

Funding

Bracket

Minimum US$ 25,000 and a maximum US$ 500,000 per project

Facility

Objectives

To provide increased access to reliable basic infrastructure and

social services to the poor in developing countries through the

wider use of Output Based Aid (OBA) approaches

Key

Activities

• To provide funding of output-based payments (i.e. operating

subsidies) to facilitate the piloting of innovative, small-scale

projects; studies and other inputs

• To assist in the design, implementation and evaluation of

projects

• To identify, document and disseminate best practices and

emerging knowledge on OBA and public services

• To build capacity with training, publications, workshops, and

conferences


41

Financing Criteria

Official creditors Identifiable project, technical

feasibility

Commercial economic feasibility

Fully budgeted, integral financing

Execution capacity, project team

Public tendering, EU international procurement rules

Financial model, feasiblity

Identity of promoters, KYC

Environmental concerns, sustainability

Long approval processes, due diligence

Private creditors, add emphasis

+ Risk identification,

allocation

- Risk < financial return

+ Client relationships


http://ppplusofonia.blogspot.com

42

Official IFI Commercial IFI Other Funding Sources

Multi-lateral, regional World Bank/IDA/IFC

MIGA

BID/CII EIB AfDB African Development Bank,

ATF African Trade Facility African Water Facility ATI African Trade Insurance

Islamic Development Bank EU/EDF

Micro-credit institutions Int´l commercial banks Capital markets Infrastructure funds

Global Environment Facility

IFAD

Suppliers (capital goods)

Clients (eg petroleum) Foundations ONG-NGO

Red Cross Save the Children

UNICEF

Bilateral

DFID, CDC, EDFIs, Cofides, SOFID, FMO, Proparco

USAID

OPIC

Eximbanks

KfW, AfD

ECAs - export credit agencies

Local banks Local credit unions Local cooperatives

Private donors, foundations

Emigrants’ remittances Contribution in kind (work, sweat equity)

FUNDING SOURCES


1. An organism of Public Administration, with:

2. Permanent obligation to provide the public service concessioned

temporarily

3. Annual budget allocation and long term debt capacity to support

public service to the extent not supported by user fees

4. Technical capacity to define, control and ensure the provision of the

public service (which cannot close down)

5. Continuing and ongoing envolvement in the public service provision

6. Authority and capacity to decide and to commit budget funds, current and

future, contingent PPP liabilities

7. Ultimate political accountability and responsability, to public service

users and to taxpayers

Attributes of the State as Grantor (Concedant)

43


More public infrastructure faster

Overcome short term budget constraints

Mobilize local counterpart funds for external grants

Avoid cost overruns of traditional public works

Improve quality as well as coverage of public services

Government Public Service Objectives


NGOs and CBOs

NGO, local or international non-

governmental organization,

specialist

Needs assessment, surveys

Project design, facilitation

between public and private

partners

Negotiations with OBA donors,

independent verification

Selection of providers,

monitoring, quality control

Training, capacity building

Representation of users

CBO, local community

based organizations, user

associations, cooperatives

Needs assessments

Service provider

Negotiation with public

partner and OBA donor

Representation of

users

45


Starting point for PPPs

Public investment program / project pipeline

Cost benefit analyses, priorities, consensus

Include PPP liabilities in Government budget / debt (MTEF)

PPP as only one of the delivery options, max 25% of public

investment

PPP Unit or management agency

Legal, regulatory and institutional frameworks

Public service program budgeting

Learning curve for transaction / contract management

Pilots projects, policies, best practices

Evaluation, transparency, accountability


Creation of PPP Project Pipeline

Project Feasibility

Technical, legal, environmental, social

Economic viability

Economic benefits exceeding economic costs

Commercial viability

Returns exceed cost plus required return on capital

Affordability and sustainability

Direct and/or contingent liabilities

Value for money assessment of PPP option


Lisboa

June 2008

http://ppplusofonia.blogspot.com

[email protected]

48

What to look for in a project

Cearly defined, short, proposal for an public or collective service , which will

Improve the quality of life for users, project participants and beneficiaries

Be appropriately dimensioned, modular

Calibration of user tariffs for O&M Opex cost recovery, after investment subsidy, or complemented by SMART /OBA operating subsidies

The ability of the promoter to receive and apply money as intended (bank account, annual audits, track record)

An explanation of how the work can become self-supporting or can find local sources of support, after donor funding ends

Alignment of the project with MDGs and Government policy, compatibility with donor principles Local self-reliance, community governance , participatory decision making

Production geared toward local consumption, food security first

Mutual Support and Accountability - Beneficiaries organized in a group which offers support and accountability to its members

Description of the experience of the project team or coordinator.


49

Exercise Phase I: Identifying, prioritizing, and

building consensus regarding PPP projects

Good PPP investment planning starts with a diverse project pipeline:

Your task: Working in groups of 3-4 people, and based your local knowledge, please take 10

minutes to identify 1-2 projects to present to other Stakeholders, the Authorities and

potential promoters, investors and/or donors. Prepare to deliver a 2-minute “elevator

speech” presenting your project to the group, which will vote to classify it as priority I, II or III.

For each project, please detail, if possible:

Public service or collective need (beneficiaries, location), outputs that can be identified and

objectively measured, volume and predictability of demand, alignment with MDGs and

Government sector policies

Project concept: scope of services, with/without construction/capex , O&M opex

Technical solution, scale, modular technology, reliability, flexibility, fixed costs

Financial solution, who will pay, user/taxpayer support required, user affordability, budget

sustainability

Public contracting authority, or concedant, form of contract , why the PPP option, procurement

Potential market interest, from private promoters, investors, sources of funding from creditors,

donors


PPP Lusofonia

50

Obrigada! Mariana ABRANTES

de Sousa

PORTUGAL

[email protected] http://ppplusofonia.blogspot.com

mailto:[email protected]

http://ppplusofonia.blogspot.com/

Small and Micro PPPs in Africa - eastafricanchamber.org · Mariana ABRANTES de Sousa Validation Workshop 09 and 10 August 2012 Mombasa Beach Hotel Mombasa, Kenya . bkp DEVELOPMENT

Documents