Public-Private Partnerships

The objective of this Guidance Note is to offer practical,
experience-based guidance to those considering or currently
engaging in PPP in the water sector, and to provide a basic
understanding of water PPPs and the PPP cycle to better
inform dialogue with governments that are considering
PPP arrangements. It builds on the experience of WSP in
supporting PPP reforms in developing countries, especially
through the domestic private sector. Key stakeholders
in this dialogue include government at all levels, service
providers, policy makers, customers, civil society, and
professionals. Many water PPP engagements in developing
countries are more domestically oriented and at a smaller
scale than international transactions. This Note outlines a
rationale and approach for launching a water sector PPP so
that government leaders and private sector providers can
have informed discussions about the path forward should
they choose to explore this approach in their countries.

In its look back at more than 15 years of experience with public-private partnerships (PPPs) for urban water utilities in developing countries, this book examines the performance of a large sample of PPPs in different regions. Directed at policy makers in governments as well as donors and other stakeholders, its aim is to better understand the contribution of water PPPs to help improve the provision of water and sanitation services to the urban populations of the developing world.
This report shows that despite difficulties in several countries, water PPP has largely passed the test of time. The urban population served by private water operators in the developing world has been growing every year since 1990, reaching about 160 million people by 2007. The positive record on service and effi ciency improvements reaffi rms the value of PPPs, even though the level of private financing did not match initial expectations. Over time, a more realistic market has developed, with a growing number of private investors from developing countries and with contract designs based on a
more pragmatic allocation of risks between partners. What emerges from examining the available empirical evidence is that well-designed partnerships between the public and the private sectors are a valid option to turn around poorly performing water utilities in developing countries.