Connections is a weekly series of knowledge notes from the World Bank Group’s Transport & Information and Communication Technology (ICT) Global Practice. It covers projects, experiences, and front-line developments.
(World Bank Group, Washington, DC, 2015-03)
Public private partnerships (PPPs) for
infrastructure projects require substantial initial funding
that private operators in developing countries can rarely
obtain in the domestic market. In 2005, in the context of
two important road projects, the government of Peru
introduced a financial innovation with two goals: improve
the access of the projects’ concessionaires to the
international financial markets and book government support
as an operating expense rather than debt. The innovations
offered distinct advantages to the concessionaires while
imposing a significant burden on the government, which has
since stopped using them. Nonetheless, the new approach can
still be useful in carefully limited instances to help solve
the funding problem.