Climate Toolkits for Infrastructure PPPs
The time for action to build a better future and green recovery has never been stronger as we navigate the uncertainty of a world attempting to manage its way out of a triple crisis: debt sustainability, climate change, and pandemic. The fiscal con...
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| Language: | English |
| Published: |
World Bank, Washington, DC
2022
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| Online Access: | http://documents.worldbank.org/curated/en/099120004052270615/P1746330d584ff0210a9670dcf49a5becb0 http://hdl.handle.net/10986/37287 |
| Summary: | The time for action to build a better
future and green recovery has never been stronger as we
navigate the uncertainty of a world attempting to manage its
way out of a triple crisis: debt sustainability, climate
change, and pandemic. The fiscal constraints of governments
across the globe open the door to new opportunities and
challenges to crowd in private sector solutions, innovation,
and finance to create new solutions and pathways to meet
Paris Agreement goals on climate change. Participation of
the private sector in climate-smart investments and
infrastructure is critical and public-private partnerships
(PPPs) are among the key solutions. PPPs are critical
because the public sector alone will not be able to fill in
the infrastructure gap without mobilizing private sector
expertise, innovative thinking, investment capacity, and
finance. PPPs can be a challenge though, because climate
change creates uncertainty and it is hard to play with
uncertain moving pieces within the framework of PPPs, which
require a certain degree of predictability to attract
investment and finance. This toolkit aims to address this
precise challenge by embedding a climate lens and approach
into upstream PPP advisory work and structuring. If
structured correctly, PPPs can increase climate resilience
offering innovative solutions to address both mitigation and
adaptation challenges. PPPs are able to provide
well-informed and well-balanced risk allocation between
partners offering long-term visibility and stability for the
duration of a contract (often 25 or 30 years, sometimes even
more), compensating climate change uncertainty through
contractual predictability. |
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