Cities and regions are increasingly exposed to more frequent climate hazards, such as floods, heatwaves, droughts and storms. Their impacts damage infrastructure, disrupt essential services and hit the most vulnerable communities first and hardest. Meeting these challenges requires major investment in adaptation, at a time when public budgets are constrained and the global adaptation finance gap continues to widen.
Public–Private Partnerships (PPPs) are one way to bring additional resources, skills and innovation into adaptation. A PPP is generally considered long-term agreement between a public authority and a private party in which the private partner helps design, finance, build, operate or maintain a public asset or service, and is paid based on performance.
When well designed, PPPs can improve the “bankability” of adaptation projects and support more resilient infrastructure and services. However, PPPs are complex and not a quick fix. Many local and regional authorities have limited experience with PPPs and face legal, institutional and capacity barriers. Concerns include unequal negotiation power, lack of transparency, unclear incentives and the risk of being locked into costly, inflexible contracts.
The following guide focuses on helping local authorities understand PPPs in the context of climate adaptation before moving towards design and implementation. It provides a general introduction to PPPs, highlighting specific features and possible arrangements.
In fact, establishing and setting a PPP is a multi-actor process that often requires coordination, complex negotiations and that can go beyond the mandate of local authorities. However, better knowledge and understanding of PPPs can position local authorities in a better position when it comes to the structing and implementation of a PPP.
What this guide explains:
The Guide explains core PPP concepts, contract models (such as DBFOM and similar variants), typical payment mechanisms and the project cycle from identification through to long-term contract management. It pays particular attention to climate risk allocation and how essential it is to keep projects financially viable while protecting the public interests.
Notes:
This publication is the result of research and engagement activities carried by Resilient Cities Network under the Horizon2020 project REGILENCE, and by Grid Engineers.