Is there still growth potential in water PPP markets?

Is there still growth potential in water PPP Markets?

 

This was the question AquaFed and the World Bank put to delegates at a series of roundtables at the Global Water Summit recently.

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Familiar challenges emerged, with most having one common theme - a lack of PPP skills and knowledge in governments and utilities:

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• Some governments pay a lot extra for consultancy to develop just a few PPP projects before budgets run out, while others simply cannot afford the help at all and don’t have enough of their own expertise. Both factors slow down the development of PPPs.

• Deal structure and project execution are the two key areas that need to be prioritised for learning. Attendees said providing information is not enough – these skills need to be taught through coaching.

• Following naturally from the points above is the question of who funds the training? Whose responsibility is it? 

• Even if coaching does occur, staff rotation with government departments means knowledge is easily lost. Senior government officers are often rotated every three years.

• Away from skills and capacity, project funding timeline mismatches were also raised. With PPPs, payback comes late into the timeline, whether 10, 15 or 25 years. But some partners, even development banks, look for earlier payback and exit.

• Development capital to de-risk projects – it was clear from attendees that simply more is needed to unlock the PPP process.

 

We held the sessions with Jason Lu, Global Lead for Water Finance, World Bank, who gave more detail about the Bank’s Water Forward Initiative and the potential role for PPPs.

 

Thanks to everyone who came and visited our table. We had a great mix of operators, consultants, investors and utilities.