Why Public-Private Partnerships are vital in infrastructure development

Phnom Penh cityscape

The infrastructure needs across Southeast Asia are immense as countries work to upgrade aging transportation networks, expand access to reliable electricity and internet, and future-proof systems against climate risks. Meeting these complex infrastructure challenges requires innovative approaches that combine resources and expertise across the public and private sectors.  

Globally, private investment in infrastructure projects is just 0.2% of total global GDP, which according to the Global Infrastructure Hub, falls well short of what is needed to meet current infrastructure needs (GIHUB, 2021). Public-Private Partnerships (PPP) provide a powerful model for countries to access upfront private financing as well as the specialised capabilities needed to properly plan, design, build and maintain advanced infrastructure assets.    

As Southeast Asia prioritises making infrastructure more resilient to climate impacts like extreme weather, PPPs will be instrumental. Importantly, PPPs provide a framework to ensure major infrastructure investments are inclusive and accessible for all community members. Having robust public consultations and representation of stakeholder voices from the outset is crucial. Governments can set clear requirements that infrastructure has equitable benefits and doesn't disadvantage marginalised groups through the PPP procurement and contracting process.

Developing PPP programs is challenging, with complexities in enabling policy environments, stakeholder management, and structuring fair risk allocations. The Asian Development Bank states that the challenge of applying PPP at large scale “requires specific and sufficient knowledge of financing structure, risks allocation, contract management...the capacity of the public sector is crucial, and it still needs resources and funds from the public side.” (ADB, 2018)

Partnering with experienced PPP advisors can help Southeast Asian nations navigate these hurdles. With well-prepared, transparent PPPs, we can harness the power of the private sector to deliver high-quality, sustainable and socially inclusive infrastructure. For instance, Partnerships for Infrastructure has worked closely with the Royal Government of Cambodia to capitalise on public infrastructure investment and build capacity among key sector project managers to equip implementing agencies with the expertise and skills to attract and secure Public-Private Partnerships. Similarly in the Philippines, P4I facilitated knowledge and best practice exchange between Australia's Infrastructure and Commercial Advisory with the Philippines Public Private-Partnership (PPP) Center to share private sector investment expertise.  

The potential benefits make PPPs essential for Southeast Asia's infrastructure needs. Leveraging experienced advisory support can guide nations in establishing enabling environments, building government capabilities, and structuring fair risk allocation frameworks. Well-designed PPP pipelines strategically engage the private sector to mobilise financing and expertise for sustainable, climate-resilient, inclusive infrastructure. As countries build PPP capacity, they can seamlessly access private investment to accelerate high-quality infrastructure development regionally.

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