SDG-driven and climate resilient local public-private partnerships

On 25 January 2024, the Global Cities Hub (GCH), in cooperation with UN-Habitat and WAPPP organized the Geneva Urban Debate on “Using local Public-Private Partnerships (PPPs) to create more reliable and resilient infrastructure”. We could hear from experts and practitioners about strategies to optimize locally aligned PPP projects for critical infrastructure development and financing. While PPPs can also be implemented at the national level, their impact for Local and Regional Governments (LRGs) is substantial.

GCH was pleased to host this multilevel and multistakeholder discussion on this issue of high importance for LRGs. The UN system and others, namely the World Association of PPPs, help develop and disseminate evidence-based international policy practices and convene experts from national, regional and local governments, businesses, academia, and civil society to formulate guidelines and evaluation frameworks, like the UNECE PPP and Infrastructure Evaluation and Rating System (PIERS). The concrete examples from Athens, Evian and Toronto served as constructive injections to the debates at the global level and as best-practices for peer-to-peer learning by other LRGs.

In their opening remarks, GCH co-director Kamelia Kemileva explained how linking LRGs to international organizations contribute to better outcomes at the global level and therefore better implementation on the ground and how PPPs complete this picture, while Graham Alabaster, chief of UN-Habitat Geneva office put the question of PPPs in relation to three main global trends: climate change, migration pressure and demographic changes.

60% of the urban space that will exist in 2050 is yet to be built. PPPs can contribute to meeting the financing needs. Addressing financing challenges include managing rising debt levels, currency fluctuations, and taking into account political considerations. With an estimated $15 trillion financing gap by 2040 and a growing urban population, it is essential to ensure a successful transition towards climate resilience and reliable infrastructure.

Jean-Christophe Barth-Coullaré, Executive Director of WAPPP set the scene explaining that around the world there are already now thousands of municipal public-private partnerships that rely on the private sector for delivery of public services, such as: water and sanitation; waste to energy; social housing; urban mobility; sport facilities; and cultural projects. There is a need to harness the power of a new generation of SDG-driven and climate resilient PPPs that deliver value for future generations.

Professor Cedric Dupont from the Geneva Graduate Institute highlighted how the different natural and man-made crises (e.g. the Covid-19, the 2008 financial crises, the natural disasters) and the increasing geopolitical tensions (e.g. USA-China) require new and differentiated political approaches. In his opinion, PPPs can offer resilient solutions for critical local infrastructure development projects, because of resource capabilities, service delivery process capabilities, and local knowledge and expertise. We need more foresight at all levels of decision making to imagine possible futures.

Helene Bakoula, Legal Counsel at Athens Urban Transport Organization presented a sustainable local infrastructure project by OASA: “Telematics System for Public Transport”. She elaborated on how to consolidate practical, legal and technical issues. This project significantly reduces CO2 emissions in the city to ensure environmental sustainability and enhance resilience. Therefore, it contributes to achieving the SDGs locally, nationally and globally. In her capacity as Vice-Chair of the Bureau of the UNECE Working Party on PPPs, she explained the PIERS system of self-assessment developed by the working party.

Rodolphe Barbaroux, SDG Advisor to the City of Evian (France) guided the audience through the historic development of the PPP between Evian and Danone. He explained that the water exploitation rights come with an obligation to support in return the local community and finance development of local infrastructure: sport, tourism and transport. The recent renegotiation of the agreement took into account the question of sustainability and is now contributing to the efforts of achieving the SDGs, especially SDG 1, 3, 4, 6, 8, 9 and 11. The city of Evian is also aiming to present a Voluntary Local Review to assess the current efforts and define a sustainable future.

Jim Mugunga, Executive Director of the PPP Unit of Uganda described eloquently how the capacity of subnational entities depend on local and national specificities, especially the level of decentralization. Capacity building and ownership of the PPPs are key for success. He pointed out that while traditional big energy infrastructure PPP projects could be handled in similar ways, local level PPPs need more differentiated approaches – for example in the area of housing and other community related projects.

François Bergère, Executive Director of the Long-Term Infrastructure Investors Association elaborated on the challenges and opportunities of PPPs at the local level. Investors often look for a minimum critical size of investment amount and a good understanding of the contractual relation from the local government side. LRGs might need assistance to develop their technical knowledge, assess the high transaction costs, and prospect to long-term development. He presented two concrete examples of how bundling or standardizing local PPP projects can help attracting the necessary finances: construction or reconstruction of schools, as well as developing or modernizing streetlighting fall usually into the responsibility of local governments and fit into this approach.

Charlotte Boutboul from the World Economic Forum presented the Global Partnership for Local Investment Initiative and explained how global challenges often require tangible answers at the local level. LRGs act in the interest of their residents and are focusing a lot on their quality of life. Best local practices of PPPs need to be scaled up to global level and shared with other cities which can implement similar projects. One of these best practices was presented by Heela Omarkhail: the Regent Park Revitalization housing PPP project from Toronto (Canada). She explained how the development of housing infrastructure married the revitalization of the local community as a result of a successful merger of public and private investments.

The GCH is exploring the idea of continuing the discussion on PPPs at local level in the margin of the forthcoming Forum of Mayors.
Link to the video below

Tuesday, January 30, 2024