Q&A: Exploring the Key Findings of the Georgia PPP Monitor
The Asian Development Bank (ADB) recently launched the Georgia Public–Private Partnership (PPP) Monitor. Helen Steward, Principal Markets Development Advisory Specialist in ADB’s Office of Markets Development and Public–Private Partnerships (OMDP), explains what the PPP Monitor is all about.
What are Public–Private Partnerships or PPPs?
Public–private partnerships are contractual arrangements where a government partners with the private sector to build and manage public infrastructure, such as roads and highways, renewable energy plants, hospitals, and schools. PPPs may also be used by government to bring in private sector to manage existing public infrastructure more efficiently.
Helen Steward, Principal Markets Development Advisory Specialist, Office of Markets Development and Public–Private Partnerships (OMDP), ADB
What is the PPP Monitor?
The PPP Monitor is a publication series of ADB. It profiles PPP-enabling environments in ADB’s developing member countries (DMCs) across Asia and the Pacific. The PPP Monitor features a data-driven, online version that allows users to compare the key PPP parameters and attributes across the featured DMCs.
Who can use the PPP Monitor?
The PPP Monitor provides the investor community with business intelligence on the enabling environment, policies, priority sectors, and deals to facilitate informed investment decisions.
For ADB DMCs the PPP Monitor serves as a diagnostic tool to identify gaps in their legal, regulatory, and institutional frameworks.
ADB and other international development agencies can also benefit from the PPP Monitor as it could be useful in initiating dialogues to assess a country’s readiness to implement PPPs to develop and sustain its infrastructure.
What are the key takeaways from the Georgia PPP Monitor?
- Georgia has a nascent but developing ecosystem for PPPs.
- ADB has been involved in developing the PPP program in Georgia for many years by facilitating the establishment of the PPP legal framework in the country.
- The government realized the importance of PPPs as an alternative way of financing infrastructure investments and has been developing a PPP institutional, policy, and legal and regulatory framework.
- In 2018, the Law of Georgia on Public–Private Partnerships, also known as the PPP Law, was adopted. This was followed by a package of bylaws related to the introduction and implementation of PPPs in Georgia.
- The PPP Law and the secondary legislation provide the legal basis for procuring and managing PPPs in Georgia. It covers both concession and non-concession types of PPPs. It provides the definition and eligibility criteria for PPPs, the various stages for project development and management, and the relevant entities involved in PPP project identification, screening, preparation, procurement, and management, including their functions. It also establishes the process for dispute resolution and the identification and management of contingent liabilities.
- The PPP Law and the secondary legislation also require the establishment of a formal PPP institutional structure including a PPP Agency, which has been set up under the Office of the Prime Minister of Georgia, and a related risk and fiscal management function under the Ministry of Finance. The PPP Agency became operational in 2019 and guidelines for identifying, appraising, procuring, implementing, and monitoring PPPs have been developed to support the PPP Law and the supporting secondary legislation.
How many PPPs have been developed in Georgia?
From 1990 to 2023, about 42 PPP projects from different sectors (e.g., airports, energy, information and communications technology, water and sewerage, and social infrastructure) successfully achieved financial closure. The total investment made in these projects is approximately $4 billion.
According to the PPP Agency, since the adoption of the PPP Law in 2018, only a few new PPPs have been initiated and reached financial closure and these have all been in the energy sector.
What challenges exist in the public private partnership landscape?
Significant progress has been made in improving the PPP landscape, especially in establishing the regulatory framework and with recent PPP training programs instigated by the PPP Agency. However, there is so far only a limited pipeline of viable projects and significant challenges remain to be addressed, including low awareness of PPPs; limited capacity of government officials; lack of PPP initiatives at the local and national levels; and lack of a project development fund, among others.
What is ADB doing to support PPPs in Georgia?
Having supported the drafting of the PPP legislation, implementing guidelines, model concession agreements, and annual fiscal risk statements, ADB is poised to support PPP development further in Georgia. PPPs offer an avenue to improve value for money in infrastructure development and service delivery. However, the current capacity of the public sector to drive and implement PPPs is constrained. ADB has been working in partnership with the PPP Agency to address some of the challenges. ADB is helping raise awareness about PPPs through events. Earlier in October, ADB held a specialist training course on PPPs for senior government officials to help address the capacity gaps and contribute toward building a pipeline of projects. ADB is also undertaking a feasibility assessment on affordable housing to explore PPP opportunities and is also in early discussion with various government agencies to help screen and prepare potential pilot PPP projects.
Countries/Economies
Subjects
- Private sector development
- Public-Private Partnerships
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