Harnessing the Power of Public-Private Partnerships

The report analyzes public-private partnerships (PPPs) as a tool for sustainable development, arguing that while PPPs can mobilize private capital and innovation for public goods, they often prioritize short-term financial value over long-term environmental and social stewardship. Through global context and case studies from Australia, Sweden, Ireland, Canada, and Morocco, the document highlights the necessity of strong public sector capacity, detailed contractual specifications, and a shift toward 'whole of life' value assessments to ensure PPPs contribute to sustainability rather than merely serving as off-balance sheet financing tools.

• Public-private partnerships (PPPs) are widely used by governments to secure off-budget funding and private sector expertise for public infrastructure, but they are not inherently environmentally friendly; their sustainability depends entirely on the priorities and specifications set by the public authority.
• The 2007–2008 global financial crisis significantly impacted the PPP market, leading to a decrease in the number and value of projects, particularly large-scale deals, and forcing a shift in risk allocation and financing structures, such as the introduction of government credit guarantees and co-lending.
• Dedicated PPP units are used by governments to build capacity and regulate partnerships, but they can introduce risks of conflict of interest and a bias toward PPPs over other procurement methods if they are not subject to strict accountability and transparency measures.
• In the case of the Victorian Desalination Plant in Australia, the project achieved high environmental standards—including a 'green roof' and 100% renewable energy offsets—not because of the PPP model itself, but because the State government conducted extensive pre-project environmental assessments and embedded 221 performance requirements into the contract.
• The Arlanda Express in Sweden serves as a cautionary tale where excessive operational freedom granted to the private partner and flawed planning led to high ticket prices and lower-than-expected patronage, which in turn hindered the government's goal of reducing airport emissions.
• The experience of the Dublin Docklands Development Authority (DDDA) illustrates the dangers of 'loose' corporate governance in public-private entities, where overlapping board memberships between the authority and its lenders led to conflicts of interest and significant public financial exposure.
• The Vancouver Landfill project in Canada demonstrates that PPPs can successfully convert waste into energy and generate revenue for the city when the public sector provides a clear environmental direction and allows the private sector creative freedom in technical solutions.
• The TEMASOL project in Morocco shows that PPPs can effectively deliver renewable energy to remote rural areas if the government provides subsidies to ensure viability and the private partner utilizes local staff to overcome trust and capacity gaps.
• Current PPP assessment tools, such as the Public Sector Comparator (PSC), are overly focused on immediate financial value and often ignore environmental and social externalities, which risks skewing projects toward short-term financial gains at the expense of long-term sustainability.

APA

Colverson, S., & Perera, O. (2012). Harnessing the Power of Public-Private Partnerships. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/harnessing_ppp.pdf

Chicago

Colverson, Samuel, and Oshani Perera. Harnessing the Power of Public-Private Partnerships. International Institute for Sustainable Development, 2012. https://www.iisd.org/system/files/publications/harnessing_ppp.pdf.

Wikipedia

{{cite report |last1=Colverson |first1=Samuel |last2=Perera |first2=Oshani |title=Harnessing the Power of Public-Private Partnerships |publisher=International Institute for Sustainable Development |date=February 2012 |url=https://www.iisd.org/system/files/publications/harnessing_ppp.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{colverson2012harnessing, author = {Colverson, Samuel and Perera, Oshani}, title = {{Harnessing the Power of Public-Private Partnerships}}, institution = {International Institute for Sustainable Development}, year = {2012}, month = feb, url = {https://www.iisd.org/system/files/publications/harnessing_ppp.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }