AquaFed's Expert Panel during the Global Water Summit explains how to grow PPP project pipeline

How to grow the pipeline of PPP projects? This was the question we asked an expert group of operators and investors at the AquaFed session on PPPs at the Global Water Summit, earlier this week.

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The objectives of the session were:

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1. To give an update on current trends in water/wastewater PPPs.

2. To discuss the key factors that enable the acceleration of PPP projects development across different regions.

3. To agree further steps that private operators and partners can take to support the development pipelines of PPP projects.

4. To mark 20 years of AquaFed and to consult attendees about new objectives the Federation should set itself.

 

AquaFed’s President, Frederic Van Heems, kicked-off the session and spoke about the opportunities we have to promote PPPs at global level, for example at the UN 2026 Water Conference and World Water Forum 2027. Fred also spoke about AquaFed’s emerging 4Ps Initiative (Public-Private Partnership Process). This is an emerging plan on how we, as operators and investors, can support governments better to grow the PPP project pipeline – right from the enabling regulatory conditions, through to understanding how to solve potential project or contractual issues.

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The panel members were:

• Cyril Courjaret, Vice President – AquaFed

• Jason Lu, Global Lead, Water Finance – World Bank

• Delphine Gilbert, Senior Investment Manager – Norfund

• Felipe Guinea, Project Finance Director – Almar Water

• Loïc Perret, Head of Infrastructure – Proparco

 

The first question to the panel was: What are the key challenges to PPP project and program formation?

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 Key points:

• Time to market is a big issue

• Establishing the right governance  eg a PPP unit

• Unclear definition of goals and targets

• Lack of capacity: 

  • especially at local level, lack of skills and knowledge and inability to manage currency risks. 

  • focus needs to be on building capacity of local companies.

  • development of projects can take 3-4 years even with transaction advisers

• Lack of information:

  • sometimes absolutely no financial level available about the utility at local level

  • lack of centralized data on existing infrastructure and assets means needs cannot be identified

• Lack of willingness on PPPs because of perceived lack of ownership and loss of control

• A big question over how many projects are actually bankable

• Question marks over a country’s integrity during project development process can lead to contagion among other DFIs.

• Private companies don’t have the money to take on so much risk during project formation

• ‘Language’ and definitions – private sector assumes public authority will understand what it is talking about

• More openness from the private sector about its returns beyond equity IRRs.
  
   

We then asked what works well and what helps project get agreed and implemented? 
 

Key points:

• Hybrid annuity model (Clean Ganga project)

• Focus first on water losses

• Fixing the utility first via PBCs to address NRW

• Energy sector works well because the sector speaks the same language – clear on things like what is the market and what is the price.

• When the governance to be clear and to know who we should be talking to.

• When water is a national priority
  
   

And finally, what can we do collectively?
 

Key points:

• Continue political interaction to explain how PPPs work and how they are a solution

• Continue to gather and share case studies and give countries PPP success stories from their peer countries

• Evidence-based communication and advisory-fill the gap in data on PPP performance

• Guidelines for developers on how best to engage with public authorities

• Gather success stories in a doc/white paper eg 30 best success stories from around the world

• Develop a whole new narrative around PPPs with better communication and performance benchmarking

• Communicate about how we are addressing climate adaptation.