Strategic Infrastructure Steps to Prepare and Accelerate Public-Private Partnerships

The report identifies a global infrastructure investment gap of at least US$ 1 trillion per year and argues that the primary obstacle to utilizing private capital is a 'project preparation gap'. It outlines 24 critical success factors across four main areas: managing a rigorous preparation process, conducting bankable feasibility studies, structuring balanced risk allocation and regulation, and creating a conducive enabling environment. The document emphasizes that PPPs should be treated as a long-term strategic programme rather than isolated projects, requiring strong political leadership, professional stakeholder engagement, and robust legal frameworks to ensure value for money and attract institutional investors.

• There is a significant global infrastructure investment gap, with annual demand estimated at US$ 3.7 trillion (5.2% of global GDP) while actual supply is only US$ 2.7 trillion (3.8% of global GDP), resulting in a shortfall of at least US$ 1.0 trillion per year.
• The 'project preparation gap' is the primary reason why many infrastructure projects fail to launch despite the availability of over US$ 60 trillion in private capital from pension funds, insurance firms, and sovereign wealth funds.
• High-quality project preparation is costly, typically consuming 1-4% of total project investment, with costs ranging from 1-2% for large projects (> US$ 500 million) to 3-4% for small projects (< US$ 100 million).
• Demand forecasting is a frequent point of failure in PPPs due to 'optimism bias' and 'strategic misrepresentation'; for example, actual traffic on greenfield toll roads is on average 23% below original projections.
• Effective risk allocation requires assigning risks to the party best able to manage them; governments can use mechanisms like sliding scales, minimum revenue guarantees, or availability-based payments to mitigate demand risk for the private sector.
• Adaptive regulation is necessary to handle long-term uncertainties; this includes automatic mechanisms like 'cost pass-through' for input price volatility or 'least present value of revenues' (LPVR) auctions that adjust concession length based on actual demand.
• A conducive enabling environment requires a robust legal framework, independent regulatory functions, and the establishment of dedicated PPP units with executive authority, ideally located within a central ministry like the Ministry of Finance.
• Corruption in developing countries can result in the loss of 10-30% of the total value of infrastructure projects.
• Governments should transition from a project-by-project approach to a long-term strategic programme, starting with uncontroversial, less complex, and financially attractive assets to build a track record.

APA

World Economic Forum (2013). Strategic Infrastructure Steps to Prepare and Accelerate Public-Private Partnerships. http://www3.weforum.org/docs/AF13/WEF_AF13_Strategic_Infrastructure_Initiative.pdf

Chicago

World Economic Forum. Strategic Infrastructure Steps to Prepare and Accelerate Public-Private Partnerships. 2013. http://www3.weforum.org/docs/AF13/WEF_AF13_Strategic_Infrastructure_Initiative.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Strategic Infrastructure Steps to Prepare and Accelerate Public-Private Partnerships |date=May 2013 |url=http://www3.weforum.org/docs/AF13/WEF_AF13_Strategic_Infrastructure_Initiative.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2013strategic, author = {{World Economic Forum}}, title = {{Strategic Infrastructure Steps to Prepare and Accelerate Public-Private Partnerships}}, institution = {World Economic Forum}, year = {2013}, month = may, url = {http://www3.weforum.org/docs/AF13/WEF_AF13_Strategic_Infrastructure_Initiative.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }