Public-Private Partnerships

This factsheet provides an overview of public-private partnerships (PPPs), detailing their definitions, common models, advantages, risks, and success factors, with a particular focus on their role in sustainable urban development and climate neutrality.

• A public-private partnership (PPP) is a collaborative arrangement between a public actor and one or more private partners, often including academia or citizen groups. These are frequently used for large infrastructure and urban development because public institutions may lack the necessary finance or knowledge of technological innovations, while private partners are seen as more efficient regarding value-for-money and delivery time. A PPP is intended to produce social revenues for citizens and financial revenues for private partners.
• PPPs are classified by the type of arrangement, technology, and the level of private sector participation. Common arrangement models involve different allocations of Design (D), Build (B), Operate (O), Own (O), Transfer (T), Finance (F), and Maintain (M). Examples include Design-Build-Operate (DBO), Build-Operate-Transfer (BOT), Build-Lease-Transfer (BLT), Build-Own-Operate-Transfer (BOOT), and Design-Build-Finance-Operate-Transfer (DBFOT).
• The advantages of PPPs include the ability to leverage private capital to free up public resources, spark innovation and cost-efficiency through private sector expertise, and allow governments to focus on core functions. However, risks include resource inequality during complex negotiations, a lack of democratic mandate, unclear profit models, and the potential for 'lock-in of costs' that becomes expensive for the public sector.
• Successful PPPs require a clear structure, early engagement with stakeholders and civil society, a full life cycle approach to urban development, and governance mechanisms that ensure accountability, transparency, and trust.
• While the Caribbean and Latin America are the most active regions for PPPs in terms of investment and project numbers, outcomes vary by location. In Ireland, the N4/N6 motorway used a DBFOT scheme costing €328 million. In Sweden, PPPs are less common and high-profile examples like the Arlanda Airport Express and the New Karolinska Hospital (which cost taxpayers 52 billion kronor or approximately €5.13 billion) have been criticized as failures due to unregulated pricing and poor partner interaction.

APA

Requena, A., Vanhuyse, F., Agerström, M., Nilsson, A., & Arra, V. (2021). Public-Private Partnerships. Stockholm Environment Institute. https://www.sei.org/wp-content/uploads/2021/06/210618a-mckay-requena-public-private-partnerships-2106e.pdf

Chicago

Requena, Alicia, Fedra Vanhuyse, Magnus Agerström, Astrid Nilsson, and Venni Arra. Public-Private Partnerships. Stockholm Environment Institute, 2021. https://www.sei.org/wp-content/uploads/2021/06/210618a-mckay-requena-public-private-partnerships-2106e.pdf.

Wikipedia

{{cite report |last1=Requena |first1=Alicia |last2=Vanhuyse |first2=Fedra |last3=Agerström |first3=Magnus |last4=Nilsson |first4=Astrid |last5=Arra |first5=Venni |title=Public-Private Partnerships |publisher=Stockholm Environment Institute |date=June 2021 |url=https://www.sei.org/wp-content/uploads/2021/06/210618a-mckay-requena-public-private-partnerships-2106e.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{requena2021publicprivate, author = {Requena, Alicia and Vanhuyse, Fedra and Agerström, Magnus and Nilsson, Astrid and Arra, Venni}, title = {{Public-Private Partnerships}}, institution = {Stockholm Environment Institute}, year = {2021}, month = jun, url = {https://www.sei.org/wp-content/uploads/2021/06/210618a-mckay-requena-public-private-partnerships-2106e.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }