Making sense of Public – Private Partnerships
PPPLab Explorations 01: A portfolio scan of the Sustainable Water Fund (FDW)
B3: Portfolio scans of FDW and FDOV • T he “change logic” of PPPs • FDW - Analysis: six categories of PPPs - Overall observations - Emerging policy issues • FDOV - Three categories of PPPs - First observations
The “change logic” of PPPs • “Change logic”: - Developmental issue the PPP seeks to address - The business drivers/cases/fin. sustainability • Research methodology: ‘ Emergent ’ grouping of PPPs based on scan of five elements: - Type of lead private partner - Type of other partners - Core focus or intervention - Anticipated benefits - Business case/financial sustainability
A. Water utilities / B. F. operators Innovative WASH (5) technology governance develop- through ment (1) M&E (1) E. C. Watershed Micro- manage- finance for ment / sanitation D. IWRM (2) (1) Irrigation manage- ment (3)
A. Improving the performance of water utilities and operators (RWA, VNM, MWI, ETH, TZA)
A. Improving the performance of water utilities and operators (5) • Lead private partner: international cooperation branch of Dutch drinking water firm . Other partners: mostly public or semi-public water utilities. • Core focus: improving efficient management of piped water systems . Anticipated benefits: increased effectiveness of water delivery and increased coverage of poor populations. • Business case/financial sustainability: long-term improvement of the financial and economic viability of utility operations.
B. Innovative technology development for water catchment and storage (ZAF) 8
B. Innovative technology development for water catchment and storage (1) • Lead private partners: four Dutch SMEs. Other partners: a public water utility, two research institutions, one local company. • Core focus: testing innovative and affordable water catchment and storage technology. Anticipated benefits: a) increased efficiency of water catchment and storage; b) increased coverage and delivery; c) reduced costs for water. • Business case/financial sustainability: for public water utility, a cheaper alternative water source than water import. For the lead Dutch companies, the export of technology.
C. Watershed management/IWRM (ETH, COL)
C. Watershed management/IWRM (2) • Lead private partner: the international private sector. Other partners: local sector organisations, (semi-)public actors, research institutions, CSOs, and consultancy firms. • Core focus: improving integrated water resource management in large catchment areas. Anticipated benefits: safeguarding the long-term use of water for productive uses. • Business case/financial sustainability: a) long-term macroeconomic advantages of good IWRM and b) improved (cost-) efficiency and sustainability of the specific productive uses.
D. Irrigation, management of irrigation infrastructure, and improved financial sustainability (GHA, PSE, LKA)
D. Irrigation, management of irrigation infra- structure & improved financial sustainability (3) • Lead private partner: local private actors (one company; two cooperative user organisations). Other partners: forms of users’ organisations, public agencies and CSOs. • Core focus: improving infrastructure and creating economic drivers to make the irrigation systems more sustainable. Anticipated benefits: farmer’s access to irrigation water and sustainable management of the infrastructure. • Business case/financial sustainability: the profitability of irrigated agriculture for farmers (and improved financial sustainability of the infrastructure).
E. Microfinance to stimulate sanitation demand and private services (KEN)
E. Microfinance to stimulate sanitation demand and private services (1) • Lead private partner: a commercial bank. Other partners: local commercial banks, CSOs and a public actor. • Core focus: provision of microfinance to consumers and households to improve sanitation, which in turn triggers private services for sanitation construction and management. Anticipated benefits: access to sanitation and strengthening of the supply chain in sanitation. • Business case/financial sustainability: the readiness of households to invest in improved sanitation and the profitability of the support services.
F. Improving WASH governance through M&E (GHA)
F. Improving WASH governance through M&E (1) • Lead private partner: private sector consists of an international cooperation branch of a Dutch company and a local telephone provider. Neither can be considered a lead partner. Other partners: Ghanaian government, a knowledge institution and two CSOs. • Core focus: gathering data on the status of rural water and sanitation systems to improve planning and maintenance. Anticipated benefits: improvements in water governance through improved information systems. • Business case/financial sustainability: no explicit ongoing business case or model for financial sustainability.
A. Water utilities / B. F. operators Innovative WASH (5) technology governance develop- through ment (1) M&E (1) E. C. Watershed Micro- manage- finance for ment / sanitation D. IWRM (2) (1) Irrigation manage- ment (3)
Overall observations • The technology development (B), irrigation/infrastructure (D), and sanitation (E) categories have the most clear-cut private sector leadership and show most real commercial engagement . • These PPPs have a more immediate case for the self-sustaining continuation of activities • In particular, the business cases and financial sustainability of the PPPs in the operator/utility (A) and watershed management/IWRM (C) PPPs are not always clear . • Generally, a large part of the budgets consists of a combination of public and private grants. This raises questions about the sustainability of the present PPPs .
Emerging policy issues • What types of PPPs and private sector engagements are aimed for? (To what degree are all segments really PPPs?) • Which subthemes in the water domain are to be stimulated? (Delta’s and IWRM? Sanitation? Waste (water) treatment?) • To what extent are the projects pro-poor ? Possible improvement? • To what degree is the portfolio promoting Dutch technology, knowledge, and products ? Does it stimulate innovation ?
PPPLab Explorations: A portfolio scan of the Facility for Sustainable Entrepreneurship and Food Security (FDOV) (30 PPPs, REPORT IN PROGRESS)
Key logics • Sourcing : lead firm seeks to strengthen supply and increase the sustainability of farming that produces that supply. • Services & inputs : lead firm offers its product to farmers (via intermediaries) serving the improvement of their production volume and system. • Improved Food Products : lead firms seek to produce improved food products for relatively poor segments of the consumer market to improve their diet.
First observations • Different kinds of lead firms in the three segments (multinationals/Dutch SMEs/local firms). • Similarities FDW: pro-poorness not always detailed, scaling and sustainability not always strong. • However, business cases/financial sustainability more clear and for relatively more cases than in FDW • Very different public-private combinations in terms of financing . In some cases not clear whether private contributions are real commercial capital or CSR money. • Limited engagement of (semi-)public actors
Making sense of Public – Private Partnerships
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