Description of Topic
Public private partnerships (PPPs) can be an important tool for governments to promote investment in infrastructure. Partnerships with the private sector can help foster new solutions and bring finance, as PPPs combine the skills and resources of both the public and private sectors through sharing of risks and responsibilities.
When providing risk sharing facilities such as guarantees in PPP contracts, governments expose themselves to fiscal risks that may impede government finances. For the sustainable success of PPP projects and to protect governments’ balance sheets, it is important for governments to identify, assess, and manage these fiscal risks.
At this webinar, David Duarte, Senior PPP Specialist at the World Bank and former head of Contingent Liabilities and PPPs at the Ministry of Finance in Chile will give an overview of risk management practices around the world. Fernando Crespo Diu, Director of the Portuguese PPP unit (UTAP), will present the case of Portugal and Peter Livesey, Head of PPP Policy in the PPP Unit of the Infrastructure and Projects Authority (IPA) will present the case of United Kingdom.
Presenters will discuss some of the following questions:
- Are fiscal risks from PPPs integrated into a holistic fiscal risk management framework?
- Who is managing fiscal risks from PPPs? Are the promotion of PPPs and risk management institutionally separated?
- What is the decision-making process when governments consider offering risk sharing facilities in individual projects? Is the decision making embedded in a holistic policy framework?
- Are risks from individual projects assessed? What about portfolio level risks? If so, what tools and methodologies are used?
- What risk management tools are being employed to manage risks? These could include the setting of exposure limits; risk monitoring; risk reporting; the provisioning for financial losses; covenants in risk sharing contracts; etc.
- What lessons having countries learned and what advice would they give to countries currently in the process of establishing risk management frameworks?